Fuling Zhacai(SZ:002507) Tianfeng Securities·2024-11-04 00:41Investment Rating - The report maintains a "Buy" rating for the company with a target price indicating an expected return of over 20% within the next six months [5]. Core Insights - The company reported steady revenue and net profit growth in Q1-Q3 2024, achieving revenues of 1.962 billion yuan and net profits of 671 million yuan, representing year-on-year increases of 0.56% and 1.74% respectively [1]. - In Q3 2024, the company saw a revenue of 657 million yuan and a net profit of 223 million yuan, with year-on-year growth of 6.81% and 17.88% respectively [1]. - The improvement in sales performance in Q3 was attributed to several factors, including increased marketing expenditures, adjustments in the sales organization, and the removal of restrictions on product distribution [1]. - The company has adjusted its product offerings and distribution channels, leading to a notable increase in profitability, with gross margin and net margin rising by 10.48 and 3.18 percentage points to 56.17% and 33.91% respectively in Q3 [2]. Financial Summary - The company’s revenue projections for 2024-2026 are adjusted to 2.534 billion, 2.709 billion, and 2.894 billion yuan, reflecting growth rates of 3%, 7%, and 7% respectively [2]. - The expected net profits for the same period are 858 million, 930 million, and 1.006 billion yuan, with growth rates of 4%, 8%, and 8% respectively [2]. - The company’s price-to-earnings (P/E) ratios for 2024-2026 are projected at 20X, 19X, and 17X [2]. Financial Data and Valuation - The company’s total revenue for 2023 is projected at 2.449 billion yuan, with a slight decline of 3.86% compared to 2022 [4]. - The net profit for 2023 is expected to be 827 million yuan, down 8.03% from the previous year [4]. - The company’s earnings per share (EPS) for 2024 is projected at 0.74 yuan, with a P/E ratio of 20.41 [4].