Namchow Food(SH:605339) Xiangcai Securities·2026-03-13 07:17Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [1]. Core Insights - The company faced significant challenges in 2025, with a notable decline in profits due to rising raw material costs and slow recovery in downstream consumption. However, signs of recovery were observed in Q4 2025 [3][4]. - The pre-baked goods segment showed strong growth, achieving revenue of 480 million, a year-on-year increase of 26.49%, driven by demand from emerging channels [5]. - Traditional business segments, including baking oils and dairy products, experienced profit pressure due to cost increases, with baking oils revenue declining by 8.86% and dairy products seeing significant margin drops [6]. Financial Performance Summary - In 2025, the company reported total revenue of 3.065 billion, a slight decrease of 2.99% year-on-year, and a net profit attributable to shareholders of 41 million, down 79.81% [3][11]. - The company’s gross margin decreased by 4.98 percentage points to 19.11% due to the inability to pass on rising costs to consumers [3]. - The cash flow from operating activities was significantly impacted, with a net cash flow of 53 million, a decrease of 77.14% year-on-year [4]. Future Outlook - The company is actively adjusting its business strategy across product, channel, and capacity dimensions to address challenges and position for long-term growth [7]. - The report anticipates revenue growth for 2026-2028, projecting revenues of 3.29 billion, 3.51 billion, and 3.72 billion, with corresponding year-on-year growth rates of 7.35%, 6.59%, and 6.12% [9][11]. - The net profit attributable to shareholders is expected to recover to 58 million, 73 million, and 77 million over the same period, with growth rates of 42.0%, 26.8%, and 4.9% respectively [9][11].