Shanghai Ziyan Foods (SH:603057) Huachuang Securities·2025-10-27 07:45Investment Rating - The report maintains a "Recommendation" rating for the company with a target price of 19.8 yuan [1]. Core Views - The company reported a revenue of 2.514 billion yuan for the first three quarters of 2025, a decrease of 6.43% year-on-year, and a net profit attributable to shareholders of 194 million yuan, down 44.37% year-on-year. In Q3 2025 alone, revenue was 1.041 billion yuan, an increase of 1.75% year-on-year, while net profit was 90 million yuan, a decrease of 40.66% year-on-year [1][8]. - The company continues to face operational pressures, but there is a focus on overseas business developments, particularly the establishment of a processing base in Nepal, which could significantly reduce tariff costs for imported beef products [8][9]. Financial Summary - Total revenue for 2024A is projected at 3.363 billion yuan, with a year-on-year growth rate of -5.3%. For 2025E, revenue is expected to decrease to 3.160 billion yuan, with a further decline of 6.0% [4]. - The net profit attributable to shareholders is forecasted to be 346 million yuan for 2024A, with a significant drop to 208 million yuan in 2025E, reflecting a year-on-year decrease of 39.8% [4]. - The earnings per share (EPS) are estimated at 0.84 yuan for 2024A, dropping to 0.50 yuan in 2025E, and gradually increasing to 0.81 yuan by 2027E [4][8]. Operational Insights - The company has approximately 5,200 stores as of October 2025, indicating a stable presence in the market despite the ongoing operational challenges [8]. - The gross profit margin for Q3 2025 was reported at 22.9%, down 5.6 percentage points year-on-year, primarily due to rising raw material costs and a decline in product mix [8][9]. - The company has seen varied performance across different regions, with significant growth in South China (73.1% year-on-year) while other regions like North China experienced a decline of 17.3% [8].