DEEJ(000423) -·2025-01-17 02:53Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 74.00 [4][24]. Core Insights - The company is optimistic about its growth in 2025, aiming for double-digit growth while ensuring sustainability [2]. - Sales trends for the company's products have shown significant year-on-year growth, with notable increases in various product categories [1]. - The company plans to continue investing in research and marketing for its main products, particularly focusing on expanding its market reach beyond Shandong province [2]. Summary by Sections Sales Performance - For the period of January to November 2024, the sales growth rates for various products were approximately 10% for Ejiao blocks, 45% for Ejiao syrup, 15% for Ejiao cakes, 100% for Ejiao powder, and over 60% for male health products [1]. Growth Strategy - The company has set a theme for 2025 as "Growth and Breakthrough," with a focus on maintaining double-digit growth and sustainable practices [2]. - The company aims to keep the average annual growth rate for Ejiao blocks below 10%, while Ejiao syrup is expected to grow by over 20% annually [2]. Financial Projections - The revised stock incentive plan indicates a compound annual growth rate (CAGR) of 15% for earnings per share (EPS) from 2023 as the base year, with net profits projected to be no less than RMB 15.2 billion in 2025 [3]. - The company anticipates a higher dividend payout ratio in 2024 compared to the previous year, which had a 100% payout ratio [3]. Valuation Metrics - The report uses a discounted cash flow (DCF) model to arrive at a target price of RMB 74.00, with a weighted average cost of capital (WACC) of 7.0% [4]. - The company's market capitalization is approximately RMB 39.9 billion (USD 5.44 billion) [5]. Market Data - As of January 15, 2025, the stock price was RMB 61.97, with a 12-month price target indicating a potential upside of 19.4% [5][9].