Dingdong(US:DDL) ZHONGTAI SECURITIES·2024-03-12 16:00Investment Rating - The investment rating for Dingdong Maicai (DDL.N) is "Buy" [5]. Core Views - Dingdong Maicai has entered a profit release phase in 2023, aligning with its strategy of prioritizing efficiency while maintaining scale. The company is expected to continue improving its cost structure and operational efficiency, leading to a turnaround in profitability [2]. - The report adjusts profit forecasts while maintaining a "Buy" rating, indicating confidence in the company's ability to achieve profitability through cost reduction and efficiency improvements [2]. - The company has demonstrated a significant improvement in its financial metrics, with a focus on core regions such as Jiangsu, Zhejiang, and Shanghai, which is expected to drive revenue growth in the future [2]. Financial Summary - Revenue Forecasts: - 2023A: 19,971 million RMB - 2024E: 20,617 million RMB - 2025E: 21,371 million RMB - 2026E: 22,153 million RMB - Growth rates: 2023A (-18%), 2024E (3%), 2025E (4%), 2026E (4%) [2]. - Net Profit Forecasts: - 2023A: -91 million RMB - 2024E: 2 million RMB - 2025E: 79 million RMB - 2026E: 118 million RMB - Growth rates: 2023A (108%), 2024E (235%), 2025E (50%), 2026E (17%) [2]. - Earnings Per Share (EPS): - 2023A: -1.45 RMB - 2024E: 0.11 RMB - 2025E: 0.47 RMB - 2026E: 0.71 RMB [2]. - Return on Equity (ROE): - 2023A: -24% - 2024E: 1% - 2025E: 17% - 2026E: 20% [2]. Operational Insights - The company has successfully transitioned to a profitable model, with a focus on optimizing store structures in Southern China and deepening its presence in key regions [2]. - Dingdong Maicai's strategy of "efficiency first, scale second" has been validated, as evidenced by its continuous profitability over five consecutive quarters [2]. - The company has improved its cash flow and balance sheet significantly, indicating a reduction in operational risks and a pathway to sustainable revenue growth [2].