Investment Rating - The investment rating for the company is "Buy" with a target price of 11.28 HKD [7][8]. Core Views - The company reported a revenue of 13.05 billion RMB in 2024, a decrease of 6.3% year-on-year, and a net profit of -0.05 billion RMB, down from 0.58 billion RMB in the same period last year. The adjusted comparable net profit was 0.54 billion RMB, a decline of 30.5% year-on-year. The negative net profit in 2024 was primarily due to non-cash foreign exchange losses, one-time marketing and promotional expenses, and restructuring costs related to channel optimization [1][3]. - Looking ahead to 2025, the company is expected to maintain good growth momentum in the nutritional supplement demand, with the probiotic business likely to continue its growth trend. The infant formula business is anticipated to improve year-on-year due to ongoing fertility policy implementations [1][4]. Summary by Sections Business Performance - In 2024, the three main business segments—Adult Nutrition (ANC), Infant Nutrition (BNC), and Pet Nutrition (PNC)—achieved revenues of 6.70 billion, 4.39 billion, and 1.97 billion RMB, respectively, with year-on-year changes of +8.8%, -25.8%, and +4.4%. The ANC segment showed strong growth driven by high demand for beauty, multivitamins, and liver detox products, while the BNC segment faced challenges due to a lengthy transition to new national standards [2][3]. Financial Metrics - The company's gross margin increased by 1.1 percentage points to 60.6% in 2024, attributed to reduced inventory provisions and product mix optimization. The adjusted comparable EBITDA margin decreased by 0.9 percentage points to 15.0% [3][4]. - The forecast for 2025-2026 has been adjusted downward due to the pressure on the infant formula business, with expected EPS of 0.81 and 0.97 RMB, representing a decrease of 41% and 39% from previous estimates [4][6]. Valuation - The target price of 11.28 HKD is based on a 13x PE ratio for 2025, reflecting an increase from the previous target of 10.22 HKD. This adjustment is in line with the recent upward trend in PE valuations for related companies due to new fertility policies being implemented [4][8].
H&H国际控股：保健品表现稳健，期待婴配粉业务改善-20250326