Yanghe(002304) 东吴证券·2024-11-05 10:22Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a significant decline in revenue and net profit for Q3 2024, with total revenue of 27.52 billion yuan, down 9.1% year-on-year, and net profit of 8.58 billion yuan, down 15.9% year-on-year. The Q3 revenue alone was 4.64 billion yuan, reflecting a drastic drop of 44.8% year-on-year, primarily due to a slowdown in industry sales and delayed channel payments [2] - The company is undergoing a restructuring phase in its marketing strategy and channel management, with a focus on stabilizing its revenue and improving cash flow. The report indicates that the revenue decline is exacerbated by weak performance in non-core markets and increased competition [2][4] - The company is expected to focus on major products and enhance its market presence through improved channel management and project-based initiatives. The aim is to rebuild a strong operational team and improve brand image [4] Financial Summary - The company's total revenue for 2022 was 30.105 billion yuan, with a projected decline to 29.813 billion yuan in 2024, representing a year-on-year decrease of 10%. The net profit for 2022 was 9.378 billion yuan, expected to drop to 8.145 billion yuan in 2024, a decrease of 18.68% year-on-year [1][4] - The latest diluted EPS is projected to be 5.41 yuan per share in 2024, down from 6.65 yuan in 2023. The P/E ratio is expected to be 14.89 in 2024, indicating a slight increase from 12.11 in 2023 [1][4] - The report highlights a significant drop in gross margin, with Q3 gross margin decreasing by 8.6 percentage points to 66.2%. The net profit margin also fell by 14.4 percentage points to 13.5% due to negative scale effects and increased costs [3]