Hengshun Vinegar(600305) 长江证券·2024-11-12 01:49Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Views - The company reported a total revenue of 1.531 billion yuan for the first three quarters of 2024, a year-on-year decrease of 6.51%. The net profit attributable to shareholders was 120 million yuan, down 13.08% year-on-year, while the net profit excluding non-recurring items was 106 million yuan, down 19.72% year-on-year. In Q3 2024, total revenue was 527 million yuan, an increase of 5.64% year-on-year, with a net profit of 26.45 million yuan, up 79.99% year-on-year, and a net profit excluding non-recurring items of 24.18 million yuan, up 75.35% year-on-year [3][4]. Summary by Sections Revenue Analysis - The demand for vinegar remains under pressure, but other product lines have shown positive growth. For Q1-Q3 2024, revenue from the vinegar series was 976 million yuan (down 5.19% year-on-year), while in Q3 alone, it was nearly flat with a decrease of 0.3% year-on-year. The wine series generated 263 million yuan (up 2.18% year-on-year), and the sauce series brought in 136 million yuan (down 10.13% year-on-year) but saw a significant increase of 26.11% in Q3 [3][4]. Profitability Improvement - The gross profit margin for Q3 2024 improved significantly, with a year-on-year increase of 9.47% to 35.61%. The overall net profit margin for Q1-Q3 2024 decreased by 0.59 percentage points to 7.85%. The increase in gross margin is attributed to a return to normal promotional activities after a significant drop in the previous year due to increased competition [4][5]. Future Outlook - The company is undergoing operational adjustments and has begun trial production of new capacities, which is expected to improve long-term operations. The company is focusing on three main product categories: vinegar, wine, and sauce, and is accelerating its national market layout. The projected net profits for 2024 and 2025 are estimated to be 133 million yuan and 204 million yuan, respectively, with corresponding EPS of 0.12 yuan and 0.18 yuan [5][6].