DEEJ(000423) SINOLINK SECURITIES·2025-03-31 08:41Investment Rating - The report assigns an "Accumulate" rating to the company for 2025 with a target price of 68.57 RMB based on a 24x PE ratio [4]. Core Views - The company demonstrates robust growth in its core business, with a strong brand presence and effective inventory management leading to resilient performance. The company is expected to achieve a net profit of approximately 1.56 billion RMB in 2024, reflecting a year-on-year increase of 35.3% [2][4]. - The company is focusing on the rapid growth of its unique product, Compound Ejiao Syrup, which has significant room for penetration in both retail and medical channels [2][3]. - The company has a healthy financial profile with a high dividend payout policy, maintaining a dividend payout ratio exceeding 96% from 2021 to 2024, and a cash reserve exceeding 8.5 billion RMB by the end of 2024 [3][4]. Summary by Sections Company Overview - Dong'e Ejiao Co., Ltd. is a leading producer of Ejiao and related products, with a history of over 70 years and a strong brand reputation. The company has successfully developed various products, including the top OTC product Ejiao and the unique Compound Ejiao Syrup [13][14]. Business Growth Drivers - The company is experiencing steady growth in its core product, Ejiao, supported by strong brand power and improved inventory management. The retail sales of Ejiao reached approximately 6.5 billion RMB in 2023, with a year-on-year growth of 11.8% [38]. - The Compound Ejiao Syrup has shown significant growth, with retail sales expected to reach 2.32 billion RMB in 2024, reflecting a year-on-year increase of 14.8% [2][55]. Financial Health - The company maintains a strong financial position with a low debt ratio of 21.1% and a negligible interest-bearing debt ratio of 1.4%. The dividend yield is projected to rise to 3.85% in 2024 [3][18]. - Revenue forecasts for 2025 to 2027 are 6.896 billion RMB, 7.997 billion RMB, and 9.223 billion RMB, respectively, with corresponding net profits of 1.84 billion RMB, 2.16 billion RMB, and 2.51 billion RMB [4][7]. Market Position - The company holds a dominant market share in the Ejiao segment, with a market share of 67.4% in 2024. The overall market for blood-nourishing products is expanding, with retail sales exceeding 16 billion RMB in 2023, growing by 21.7% year-on-year [30][38]. - The company is also expanding into the male health supplement market with the launch of the "Royal Arena 1619" brand, targeting a new consumer demographic [3][67].