KPC(SH:600422) SINOLINK SECURITIES·2025-03-12 06:19Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [11]. Core Insights - The company reported a revenue of 8.40 billion RMB for 2024, a slight decrease of 0.34% year-on-year, while the net profit attributable to shareholders increased by 19.86% to 648 million RMB [1]. - The company is undergoing comprehensive reforms and enhancing its operational systems, which are expected to lead to improved efficiency and sales growth for core products [2]. - The integration with China Resources Sanjiu is showing positive results, with core products anticipated to enter a growth phase due to stable procurement contracts and effective channel management [3]. Summary by Sections Performance Review - In 2024, the company achieved a total revenue of 8.40 billion RMB, reflecting a year-on-year decline of 0.34%. The net profit attributable to shareholders was 648 million RMB, marking a year-on-year increase of 19.86% [1]. - The adjusted net profit for Q4 2024 was approximately 130 million RMB, significantly improving from 25 million RMB in Q4 2023 [1]. Operational Analysis - The company is implementing a 4C operational system to enhance organizational efficiency and talent management, aiming for a more integrated structure [2]. - The company has successfully renewed procurement contracts for its core products, with expectations for increased market penetration and sales volume [2]. - Key products such as Shenling Baizhu Powder and Shugan Wan have shown a combined revenue growth of 20%, with one product surpassing 100 million RMB in revenue [2]. Profit Forecast, Valuation, and Rating - The company is projected to achieve net profits of 740 million RMB, 893 million RMB, and 1.07 billion RMB for the years 2025, 2026, and 2027, respectively, with growth rates of 14%, 21%, and 20% [3]. - The earnings per share (EPS) are expected to be 0.98 RMB, 1.18 RMB, and 1.42 RMB for the same years, with corresponding price-to-earnings (P/E) ratios of 18, 15, and 13 [3].