Hengshun Vinegar(600305) 华泰证券·2025-04-22 09:24Investment Rating - The investment rating for the company is "Buy" with a target price of 9.36 RMB [7][8]. Core Views - The company reported strong Q4 performance with revenue of 660 million RMB, a year-on-year increase of 41.9%, and a turnaround in net profit to 7 million RMB from a loss in the previous year [1]. - The company aims to focus on its main products, including vinegar, wine, and sauces, while also expanding its product range to enhance scale effects [2][4]. - The company has improved its profit margins, with a net profit margin of 5.8% for the year, up 1.7 percentage points year-on-year, driven by cost benefits and a reduction in expenses [3]. Revenue and Profitability - For 2024, the company expects revenue of 2.196 billion RMB, a 4.25% increase, and a net profit of 127.34 million RMB, a 46.54% increase [6]. - The main product categories for 2024 are projected to generate revenues of 1.27 billion RMB from vinegar, 330 million RMB from wine, and 180 million RMB from sauces, with other products showing significant growth [2]. Cost and Expense Management - The company achieved a gross margin of 34.7% for 2024, benefiting from economies of scale and cost reductions [3]. - The sales expense ratio decreased by 0.8 percentage points to 17.9%, while the management expense ratio increased slightly due to performance incentive provisions [3]. Future Outlook - The company is expected to continue improving its operational performance, with projected EPS of 0.17 RMB for 2025 and 0.19 RMB for 2026, reflecting a significant increase from previous estimates [4][6]. - The target price reflects a valuation premium based on expected continued reform and operational improvements [4].