KE MING FOOD(SZ:002661) Huaxin Securities·2025-03-24 09:58Investment Rating - The report maintains a "Buy" investment rating for the company [8]. Core Views - The company has turned its profit around, achieving a net profit of 1.46 billion yuan in 2024, compared to a loss of 0.66 billion yuan in 2023, despite a 12% decrease in revenue to 45.67 billion yuan [2]. - The company is focusing on brand cultivation and has seen a stabilization and recovery in its pig farming business, with a 3% increase in pig sales in early 2025 [3]. Summary by Sections Financial Performance - In 2024, the company reported a revenue of 45.67 billion yuan, down 12% year-on-year, primarily due to reduced pig sales from factory cleaning. The net profit was 1.46 billion yuan, a significant recovery from a loss of 0.66 billion yuan in 2023. The fourth quarter of 2024 saw a revenue of 10.92 billion yuan, a 13% decrease, with a net loss of 0.09 billion yuan [2]. - The gross margin improved by 8 percentage points to 20.87% in Q4 2024, driven by rising pig prices and falling wheat prices [2]. Business Strategy - The company is enhancing its product strategy, focusing on high-end soft and elastic noodle products, with a target to create a billion-yuan product in 2025. The revenue from instant food increased by 4% to 3.27 billion yuan in 2024 [3]. - The pig farming and slaughtering revenue decreased by 24% and 15% respectively, but early 2025 sales showed a recovery trend with 7.05 thousand pigs sold, a 3% increase [3]. Earnings Forecast - The company is expected to see earnings per share (EPS) of 0.48 yuan, 0.54 yuan, and 0.64 yuan for 2025, 2026, and 2027 respectively, with a projected net profit growth rate of 12.8% in 2025 [4][10]. - The forecasted revenue for 2025 is 46.57 billion yuan, reflecting a 2% growth from 2024 [10]. Market Position - The company is actively reforming its distribution channels to improve efficiency, focusing on direct consumer engagement and expanding into new market segments [3]. - The current stock price is 10.07 yuan, with a total market capitalization of 35 billion yuan [4].