DEEJ(SZ:000423) KAIYUAN SECURITIES·2025-08-22 13:22Investment Rating - The investment rating for Dong'e Ejiao is maintained at "Buy" [1] Core Views - The company's operating performance is steadily improving, with significant cash flow indicators showing improvement. For H1 2025, revenue reached 3.051 billion yuan, a year-on-year increase of 11.02%, and net profit attributable to shareholders was 818 million yuan, up 10.74% [4][5] - The report highlights the company's long-term development potential, particularly in deepening its focus on the Ejiao category, men's health products, and industry chain layout [4][5] Financial Performance Summary - In H1 2025, the company's revenue from Ejiao and related products was 2.845 billion yuan, growing by 11.50%, with a gross margin of 74.83% [5] - The net cash flow from operating activities in Q2 2025 was 1.270 billion yuan, showing significant improvement compared to Q1 2025, primarily due to a decrease in accounts receivable [5] - The company has adjusted its profit forecasts for 2025-2027, expecting net profits of 1.787 billion yuan, 2.105 billion yuan, and 2.474 billion yuan respectively [4][5] Research and Development Strategy - The company is enhancing its research platform to support technological innovation, implementing a strategy that includes establishing a national engineering technology research center for gelatin-based traditional Chinese medicine [6] - The strategy focuses on creating high grounds for raw material cultivation, traditional Chinese medicine research, and health consumer product development [6] Financial Summary and Valuation Metrics - For 2025, the expected earnings per share (EPS) is projected at 2.78 yuan, with a price-to-earnings (P/E) ratio of 18.4 times [8] - The company's gross margin is expected to be 73.0% in 2025, with a net margin of 26.7% [8][11] - The report provides a detailed financial forecast, indicating a steady growth trajectory in revenue and profit margins over the next few years [10]