KE MING FOOD(002661) 华鑫证券·2025-01-23 05:54Investment Rating - The report maintains a "Buy" investment rating for the company [4][6]. Core Insights - The company is expected to achieve a net profit attributable to shareholders of 120-180 million yuan in 2024, marking a turnaround from losses in the previous year. The fourth quarter of 2024 is projected to show a net profit ranging from a loss of 35 million yuan to a profit of 25 million yuan, compared to a loss of 77 million yuan in the fourth quarter of 2023 [2]. - The improvement in profitability is attributed to rising pig prices, reduced operational losses in the breeding business, an increased proportion of high-margin products in the food sector, and a decrease in wheat costs that further enhances gross margins [2]. - The company is focusing on brand development and optimizing channel investment strategies. It aims to create a billion-yuan product by 2025 and is expanding into new retail channels such as convenience stores [3]. Summary by Sections Financial Performance - The company’s earnings per share (EPS) forecasts for 2024-2026 are adjusted to 0.44, 0.46, and 0.55 yuan respectively, with corresponding price-to-earnings (PE) ratios of 23, 22, and 18 times [4]. - The main revenue for 2024 is projected at 4.671 billion yuan, with a decline of 9.9% from 2023, followed by a slight recovery in subsequent years [10]. - The net profit for 2024 is expected to be 151 million yuan, a significant recovery from a loss of 66 million yuan in 2023 [10]. Market Strategy - The company is enhancing its product line by focusing on high-end soft and elastic noodle products and increasing terminal investment to improve market penetration [3]. - It is reforming its distribution channels by tightening credit and directly investing in consumer engagement initiatives to improve the efficiency of channel expenses [3]. Key Financial Metrics - The company’s gross margin is expected to improve from 12.4% in 2023 to 19.3% by 2026, indicating a positive trend in profitability [12]. - The return on equity (ROE) is projected to recover from -2.4% in 2023 to 6.3% in 2026, reflecting improved financial health [12].