Eastroc Beverage(SH:605499) SINOLINK SECURITIES·2025-04-16 00:23Investment Rating - The report maintains a "Buy" rating for the company, with expected profit growth of 35% in 2025, 27% in 2026, and 26% in 2027, corresponding to PE ratios of 31x, 24x, and 19x respectively [3]. Core Insights - The company reported Q1 2025 revenue of 4.848 billion RMB, a year-on-year increase of 39.23%, and a net profit of 980 million RMB, up 47.62% year-on-year, exceeding expectations [2]. - The company is experiencing strong growth in various product lines, particularly during the Spring Festival, with significant increases in sales for special drinks and bottled water [2][3]. - The company is expanding its market presence outside Guangdong, with a notable increase in the number of distributors, particularly in the North China market [2]. Performance Analysis - The company's gross margin and net margin for Q1 2025 were 44.5% and 20.2%, respectively, reflecting improvements due to lower raw material costs [3]. - Sales and management expense ratios decreased, indicating effective scale efficiencies, while sales expenses increased due to new product promotions [3]. - The company is expected to maintain high growth in Q2 2025, supported by favorable inventory levels and strong sales momentum [3]. Financial Projections - Revenue projections for 2023 to 2027 are 11.263 billion RMB, 15.839 billion RMB, 20.907 billion RMB, 26.164 billion RMB, and 31.829 billion RMB, with growth rates of 32.42%, 40.63%, 32.00%, 25.14%, and 21.65% respectively [7]. - Net profit projections for the same period are 2.040 billion RMB, 3.327 billion RMB, 4.474 billion RMB, 5.690 billion RMB, and 7.142 billion RMB, with growth rates of 41.60%, 63.09%, 34.50%, 27.18%, and 25.50% respectively [7]. - The report highlights a strong return on equity (ROE) forecast, with figures of 32.26% in 2023 and declining to 35.89% by 2027 [7]. Market Sentiment - The report indicates a positive market sentiment with a high number of "Buy" ratings over various time frames, suggesting strong investor confidence in the company's future performance [9].