Fuling Zhacai(SZ:002507) CMS·2025-03-31 14:33Investment Rating - The report maintains a "Strong Buy" rating for the company [1][6][7]. Core Views - The company experienced a decline in Q4 revenue and profit, with revenue and net profit down by 14.77% and 23.12% year-on-year, respectively. This decline was attributed to the timing of revenue recognition, reduced marketing expenses during the off-season, and decreased consumer stockpiling demand [1][6][7]. - For 2025, the company has set a revenue growth target of 8%, expecting profit growth to outpace revenue growth. The company aims to strengthen its competitive advantages and improve channel management and internal efficiency [1][6][7]. - The current market expectations are low, and the company's valuation is at a historical low. The company has sufficient cash reserves and plans to significantly increase dividends to enhance shareholder returns [1][6][7]. Financial Performance Summary - In 2024, the company reported total revenue of 2.387 billion yuan, a decrease of 3% year-on-year, and a net profit of 799 million yuan, also down by 3% year-on-year. The Q4 revenue was 425 million yuan, reflecting a significant decline [5][7]. - The company’s gross margin for 2024 was 50.99%, with a net margin of 33.49%. The gross margin in Q4 was 43.38%, impacted by revenue decline and rigid production costs [5][6][7]. - The company plans to maintain a gross margin of 51.8% in 2025, with operating costs expected to grow by 6.25% [6][7]. Product and Market Strategy - The company is focusing on optimizing its product structure, with the pickled vegetable segment showing promising performance. The revenue from pickled vegetables increased by 2.2% year-on-year, while the revenue from radishes decreased significantly [5][6]. - The company is implementing a strategy to reclaim market share through product improvements and new product launches, particularly in the condiment and prepared food sectors [6][7]. Shareholder Returns - The company plans to increase its dividend payout significantly, with a dividend of 485 million yuan planned for 2025, reflecting a payout ratio of 60.6% [5][6][7]. - The expected earnings per share (EPS) for 2025 and 2026 are projected to be 0.76 yuan and 0.77 yuan, respectively, with a corresponding price-to-earnings (PE) ratio of 18 times for 2025 [1][6][7].