DEEJ(000423) 华泰证券·2025-03-19 04:25Investment Rating - The report maintains an "Accumulate" rating for Dong'e Ejiao [8] Core Views - Dong'e Ejiao is expected to maintain strong growth momentum in 2024, with projected revenues, net profit attributable to shareholders, and net profit excluding non-recurring items of RMB 5.921 billion, RMB 1.557 billion, and RMB 1.442 billion respectively, representing year-on-year growth of 25%, 35%, and 33% [1][5] - The company has implemented comprehensive reforms since 2022, focusing on "four restructurings" to enhance sales and profits, which supports a positive outlook for the company's future growth [1][4] - The company plans to distribute a high dividend of RMB 1.554 billion, accounting for 99.7% of the annual net profit attributable to shareholders, reflecting strong cash flow and commitment to shareholder returns [1][4] Summary by Sections Financial Performance - The sales revenue of Dong'e Ejiao and its related products reached RMB 5.54 billion in 2024, up 27% year-on-year, with a gross margin of 73.6%, an increase of 1.3 percentage points year-on-year [2] - The fourth quarter of 2024 saw revenues of RMB 1.59 billion, with net profit attributable to shareholders at RMB 410 million, reflecting a 10% increase year-on-year [2] - The company reported a net cash flow from operating activities of RMB 2.171 billion, which is higher than the net profit, indicating strong operational efficiency [2] Strategic Initiatives - The company revised its stock incentive plan in January 2025, raising performance targets, including an increase in the exercise price from RMB 24.98 to RMB 37.22 per share and enhancing return on equity (ROE) targets for 2025-2027 [3] - The "four restructurings" and the "1238" development strategy are being actively implemented to focus on the core business of Ejiao and promote long-term healthy development [4] Valuation and Forecast - The report forecasts net profit attributable to shareholders for 2025-2027 to be RMB 1.840 billion, RMB 2.230 billion, and RMB 2.577 billion respectively, with an upward revision for 2025 [5] - The target price is set at RMB 85.72, based on a 30x PE valuation for 2025, reflecting a premium due to the expected continuous improvement in revenue and profit driven by strategic initiatives [5][9]