KE MING FOOD(SZ:002661) Huaxin Securities·2025-05-11 14:23Investment Rating - The report maintains a "Buy" investment rating for the company [7] Core Views - The company has shown impressive profit growth, focusing on cultivating major products [5] - In Q1 2025, the company reported total revenue of 1.121 billion yuan, a decrease of 14% year-on-year, while net profit attributable to shareholders increased by 76% to 86 million yuan [4][5] - The company is optimizing costs, resulting in a gross margin increase of 6 percentage points to 22.88% due to lower raw material costs and product structure optimization [5] - The company is concentrating on high-end products and has seen a stable growth in its instant food segment, with efforts to develop major products like "Wuhan Hot Dry Noodles" [6] - The pig farming business is stabilizing, with improvements in cost, output, and PSY metrics, and is expected to turn profitable for the year [6] Summary by Sections Financial Performance - The company expects EPS for 2025-2027 to be 0.49, 0.56, and 0.66 yuan respectively, with corresponding PE ratios of 21, 19, and 16 times [7] - The main revenue for 2025 is projected at 4.657 billion yuan, with a growth rate of 2% [10] - The net profit for 2025 is forecasted to be 165 million yuan, reflecting a growth rate of 12.8% [10] Business Strategy - The company is focusing on major product development and enhancing its high-end product offerings while maintaining stable overall expense ratios [5][6] - It aims to deepen existing channels and expand into new markets, particularly in the snack and emerging channel sectors [6] Market Position - The company is positioned to benefit from a favorable supply-demand balance in the pig farming sector, which is expected to support profitability [6]