Yanghe(SZ:002304) GUOTAI HAITONG SECURITIES·2025-08-19 07:11Investment Rating - The investment rating for the company is "Accumulate" with a target price of 81.59 CNY [7][14]. Core Views - The company is currently experiencing a downward adjustment, moving towards an earnings bottom, with expectations of stable growth and high dividends, positioning it as a quasi-debt asset [3][14]. - The company's revenue and net profit for Q2 2025 have decreased significantly by 43.67% and 62.66% year-on-year, respectively, indicating ongoing pressure in the market [14]. - Despite the current challenges, there is potential for recovery as the industry cycle improves, and the company is expected to benefit from a decline in risk-free yields [14]. Financial Summary - Revenue for 2023 is reported at 33,126 million CNY, with projections of 28,876 million CNY for 2024 and a further decline to 20,923 million CNY in 2025, reflecting a year-on-year decrease of 12.8% and 27.5%, respectively [5]. - Net profit attributable to the parent company is expected to drop from 10,016 million CNY in 2023 to 6,673 million CNY in 2024 and further to 4,067 million CNY in 2025, marking a decline of 33.4% and 39.1% [5]. - The earnings per share (EPS) is projected to decrease from 6.65 CNY in 2023 to 2.70 CNY in 2025 [5]. Market Data - The company's market capitalization is approximately 105,210 million CNY, with a 52-week stock price range of 63.83 CNY to 99.19 CNY [8]. - The current stock price is 69.84 CNY, with a price-to-earnings (P/E) ratio of 10.35 for 2023, increasing to 25.48 for 2025 [14][8]. Profitability and Cash Flow - The gross margin for Q2 2025 has decreased to 73.4%, with a net profit margin dropping to 19.0%, reflecting significant pressure on profitability [14]. - The company has maintained a strong dividend payout ratio, indicating a commitment to returning value to shareholders despite current earnings challenges [14].