ANGEL YEAST(SH:600298) Guotai Junan Securities·2024-04-21 05:32Investment Rating - Maintain "Overweight" rating with a target price of CNY 39.50 [1][2] Core Views - Performance in Q1 2024 fell below expectations, with revenue and net profit growth slowing down [1] - Overseas business grew faster, but profitability remains under pressure due to market competition and structural adjustments [1] - Domestic demand recovery is weak, while overseas markets show relatively strong growth [1] - Cost pressures are expected to ease gradually, and potential incentives may lead to improvements [1] - The company's yeast derivatives business has growth potential both domestically and internationally [1] Financial Performance - Q1 2024 revenue reached CNY 3.483 billion, up 2.52% YoY, while net profit declined by 9.45% YoY to CNY 319 million [1] - Gross margin in Q1 2024 decreased by 0.7 percentage points YoY to 24.7% [1] - Net profit margin dropped by 1.2 percentage points YoY to 9.2% in Q1 2024 [1] - Revenue from yeast and deep processing increased by 5.4% YoY, while sugar production revenue declined by 17.6% YoY [1] - Domestic revenue decreased by 4.5% YoY, while overseas revenue grew by 16.7% YoY [1] Financial Forecasts - Revenue is expected to grow from CNY 13.581 billion in 2023 to CNY 19.184 billion in 2026 [1][2] - Net profit is projected to increase from CNY 1.270 billion in 2023 to CNY 1.852 billion in 2026 [1][2] - EPS is forecasted to rise from CNY 1.46 in 2023 to CNY 2.13 in 2026 [1][2] - Gross margin is expected to remain stable at around 25.2% from 2024 to 2026 [2] - ROE is projected to improve from 12.6% in 2023 to 13.3% in 2026 [2] Business Overview - The company is a leading producer of natural yeast in China, specializing in yeast and related products [2] - Main products include baking yeast, brewing yeast, yeast extracts, and nutritional health products [2] - Products are widely used in baking, brewing, food seasoning, pharmaceuticals, and animal nutrition [2] Market and Valuation - The company's market capitalization is approximately CNY 26.115 billion [2] - The stock's 52-week price range is between CNY 28.69 and CNY 40.28 [2] - The current P/E ratio is 19.03x for 2024E, expected to decline to 14.10x by 2026 [2] - EV/EBITDA is projected to decrease from 10.31x in 2024E to 9.51x in 2026 [2]