ANGEL YEAST(SH:600298) GOLDEN SUN SECURITIES·2025-08-24 08:56Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [4][6]. Core Views - The company is expected to enter a profit release cycle starting in 2025, driven by favorable cost and capacity dynamics, alongside potential price increases due to demand recovery [3][4]. - Historical profit release cycles have shown that the company typically outperforms the food and beverage sector during these periods, with significant profit elasticity contributing to excess returns [1][14]. Summary by Sections Stock Price Review - The company has historically demonstrated excess returns during profit release cycles, particularly noted in years such as 2009, 2016-2018, and 2020, attributed to faster profit elasticity release compared to the sector [1][14]. Profit Cycle Review - The report highlights three historical profit release cycles: 1. In 2009, net profit margin increased by 6.8 percentage points, driven by accelerated overseas revenue growth and a decline in costs [2][19]. 2. From 2015 to 2017, the company experienced a cumulative net profit margin increase of 10.7 percentage points, aided by reduced depreciation pressure and proactive price increases amidst a favorable demand environment [2][33]. 3. In 2020, a strong demand for small packaging products led to a 3.6% increase in net profit margin, primarily due to proactive pricing strategies [2][51]. Current Outlook - The company is expected to maintain double-digit revenue growth, with domestic demand stabilizing and overseas markets showing high growth potential [3][4]. - The cost cycle is anticipated to benefit from a decline in sugar molasses prices, with projections indicating a significant drop to 1000-1100 RMB/ton by January 2025 [3][4]. - The production capacity cycle is nearing the end of its investment phase, which is expected to alleviate depreciation pressure post-2023 [3][4]. - Historical trends suggest that the company can increase prices in response to demand recovery, particularly in a balanced capacity environment [3][4]. Financial Forecast and Valuation - The company is projected to achieve net profits of 1.64 billion, 1.92 billion, and 2.19 billion RMB for the years 2025, 2026, and 2027, respectively, reflecting year-on-year growth rates of 23.6%, 17.1%, and 14.4% [4][5]. - The current price-to-earnings (P/E) ratios for the forecasted years are 21, 18, and 16 times, indicating that the stock is still trading at historically low valuations [4][5].