AHB(SH:688639) Ubs Securities·2025-04-23 10:05Investment Rating - The report assigns a "Buy" rating for the company with a 12-month target price of RMB 50.00, down from the previous target of RMB 58.00 [5][24]. Core Insights - The company's revenue for 2024 is projected to be RMB 2.18 billion, representing a year-on-year growth of 12.4%, while net profit is expected to decline by 58% to RMB 190 million due to a significant drop in valine prices and lower-than-expected sales of new products [1][2]. - In Q1, the company reported a net profit of RMB 51.1 million, a decrease of 41% year-on-year but an increase of 160% quarter-on-quarter, primarily driven by a 9.5% rise in the average price of valine [1][2]. - The company is focusing on new product sales and has adjusted some production lines to flexible production to respond to market conditions [3]. Summary by Sections Financial Performance - The company's amino acid product revenue grew by 3% to RMB 1.51 billion in 2024, but gross margin decreased by 13.32 percentage points to 30% due to a 37% drop in the average market price of valine [2]. - Vitamin product revenue fell by 5% to RMB 207 million, with a gross margin decline of 34.33 percentage points to 21% due to significant price drops in products like myo-inositol and D-calcium pantothenate [2]. - Other products, including malic acid and arbutin, saw a revenue increase of 319% to RMB 89 million, although gross margin decreased by 13.93 percentage points to 29% [2]. Product Development - The company is actively advancing projects for alternating production of amino acids and is implementing flexible production capabilities for products like succinic acid and malic acid [3]. Valuation - The target price has been adjusted to RMB 50 based on a DCF valuation method, reflecting a 22-51% downward revision in profit forecasts for 2025-2027 [4].