ANGEL YEAST(600298)2025-04-27 07:45Investment Rating - The report maintains a "Strong Buy" rating for the company, with a target price of 44 CNY, indicating a potential upside of over 30% from the current price of 33.69 CNY [2][3][7]. Core Views - The report emphasizes that the company is entering a new profit cycle, driven by significant cost reductions and a peak in depreciation, which will lead to at least two years of profit improvement. The company is positioned to become the global leader in the yeast market, with substantial growth opportunities in developing countries [2][7][8]. - The report highlights the company's strong pricing power, which allows it to increase prices during cost-up cycles, and the expected decline in sugar molasses costs, which will enhance profit margins [8][9][22]. Financial Summary - Projected total revenue (in million CNY) for the years 2024 to 2027 is as follows: 15,197 (2024), 17,110 (2025), 19,138 (2026), and 21,307 (2027), with year-on-year growth rates of 11.9%, 12.6%, 11.9%, and 11.3% respectively [3]. - The projected net profit (in million CNY) for the same period is: 1,325 (2024), 1,519 (2025), 1,876 (2026), and 2,179 (2027), with growth rates of 4.3%, 14.7%, 23.4%, and 16.2% respectively [3]. - Earnings per share (EPS) are forecasted to be 1.52 CNY (2024), 1.75 CNY (2025), 2.16 CNY (2026), and 2.51 CNY (2027) [3]. Profit Cycle Analysis - The report discusses the profit cycle, indicating that the company is at the bottom of its profit cycle, with a clear path for improvement over the next two years due to falling costs and a peak in depreciation [8][9][14]. - The report quantifies the potential for profit improvement, estimating that gross margins could increase by at least 2.5 percentage points due to favorable sugar molasses pricing [8][9][10]. Long-term Growth Drivers - The company is expected to benefit from accelerated overseas expansion, with a current global market share of approximately 20%, and significant growth potential in emerging markets [8][9][10]. - The report outlines the company's strategy for overseas market penetration, which includes establishing local subsidiaries and leveraging competitive pricing and service advantages [8][9][10]. Investment Recommendations - The report suggests that the current price offers a good entry point for investors, given the expected improvement in profit margins and the long-term growth potential in both domestic and international markets [8][9][10].