LONGDA(002726) 开源证券·2024-11-03 15:30Investment Rating - The report maintains a "Buy" rating for Longda Foodstuff (002726 SZ) [1] Core Views - Pre-made dishes business remains stable against market trends while breeding and slaughtering operations show improvement [1] - The company achieved a turnaround in net profit in 2024Q1-Q3 with revenue of 8 014 billion yuan (down 20 7% YoY) and net profit of 73 million yuan [3] - For 2024Q3 revenue reached 2 97 billion yuan (down 12 1% YoY) with net profit of 15 million yuan and operating cash flow of 64 million yuan [3] - The report forecasts net profits of 95/212/330 million yuan for 2024-2026 with corresponding EPS of 0 09/0 20/0 31 yuan [3] Business Performance Pre-made Dishes - Food segment revenue reached 1 707 billion yuan in 2024Q1-Q3 remaining flat YoY [4] - Pre-made dishes revenue stood at 1 509 billion yuan flat YoY but up 34 61% QoQ driven by strong demand from catering clients and seasonal factors [4] - Gross margin improved by 4 5 percentage points to 11 61% due to lower raw material costs [4] - Key products achieved significant scale with large intestine surpassing 200 million yuan and sausages exceeding 100 million yuan in revenue [4] Slaughtering - Slaughtering volume reached 3 6008 million heads in 2024Q1-Q3 showing a YoY decline due to weak demand for fresh products and controlled frozen inventory [4] - Despite lower volumes the segment showed improved gross profit [4] Breeding - Breeding output reached 247 600 heads in 2024Q1-Q3 showing a YoY decline [4] - The segment returned to profitability benefiting from rising pig prices and lower breeding costs [4] Financial Performance - In 2024Q3 gross margin increased by 1 44 percentage points YoY driven by higher pig prices and lower raw material costs [5] - The company maintained cost control with sales management and R&D expense ratios decreasing by 0 08 0 05 and 0 02 percentage points respectively [5] - Financial expense ratio remained stable [5] Strategic Focus - The company continues to focus on large B clients in the pre-made dishes business consolidating existing clients and developing new ones [6] - New product categories are being expanded with new clients gradually contributing to orders [6] - The pre-made dishes business maintained its scale advantage in 2024 and is expected to benefit from potential recovery in catering demand [6] Financial Projections - Revenue is projected to grow from 14 294 billion yuan in 2024E to 21 082 billion yuan in 2026E [7] - Net profit is forecasted to increase from 95 million yuan in 2024E to 330 million yuan in 2026E [7] - Gross margin is expected to improve from 4 5% in 2024E to 5 0% in 2026E [7] - ROE is projected to recover from 5 7% in 2024E to 15 2% in 2026E [7]