Fuling Zhacai(SZ:002507) Southwest Securities·2025-03-03 09:15Investment Rating - The report maintains a "Buy" rating for Fuling Zhacai (002507) with a target price of —— yuan over the next six months [1]. Core Views - The company's Q4 performance was slightly below expectations, with a revenue of 4.5 billion yuan, down 10.6% year-on-year, and a net profit of 1.5 billion yuan, down 8.4% year-on-year. The overall annual revenue for 2024 is projected at 24.1 billion yuan, a decrease of 1.7% year-on-year, and a net profit of 8.2 billion yuan, a decrease of 0.3% year-on-year [8][9]. - The decline in Q4 revenue is attributed to weak consumer demand and the traditional off-season for pickled vegetables, alongside reduced channel spending and inventory clearance efforts [8]. - Looking ahead to 2025, the company expects revenue growth to stabilize due to increased market penetration of new products and the gradual opening of the catering market [8]. - The company has experienced a cost advantage, with a net profit margin of 34.8% for 2024, up 1 percentage point year-on-year, and a Q4 net profit margin of 36.9%, up 3.3 percentage points year-on-year, primarily due to the use of low-cost raw materials [8][9]. Financial Summary - For 2023A, the company reported a revenue of 2,449.85 million yuan and a net profit of 826.58 million yuan. The projections for 2024E are a revenue of 2,407.96 million yuan and a net profit of 824.06 million yuan, with expected growth rates of -1.71% and -0.30% respectively [3][9]. - The earnings per share (EPS) for 2024 is estimated at 0.71 yuan, with a price-to-earnings (PE) ratio of 19 [3][9]. - The return on equity (ROE) is projected to decline slightly from 10.03% in 2023 to 9.09% in 2024 [3][9].