CHINA PET FOODS(SZ:002891) Huachuang Securities·2024-04-24 14:32Investment Rating - The report maintains a "Recommended" rating for the company, with a target price of 38 CNY per share, corresponding to a PE ratio of 41.3 times for 2024 [3][5][18]. Core Insights - The company's overseas business has shown a recovery in growth, with revenue reaching 2.662 billion CNY in 2023, a year-on-year increase of 13.44%. The gross margin for overseas operations was 25.22%, up by 7.97 percentage points [3]. - Domestic business revenue surpassed 1 billion CNY, growing by 20.40% year-on-year, with a gross margin of 31.28%, an increase of 3.51 percentage points. The domestic business's contribution is approaching 30% of total revenue [3]. - Brand adjustments have been completed, with expectations for new product launches to drive growth. The Zeal brand has seen price control measures completed in Q2 and Q3 of 2023, leading to slight growth in Q4. The Wanpy brand underwent SKU streamlining in the first three quarters of 2023, with plans for more focused product promotions [3]. - The overseas business provides a stable profit cushion, allowing the company to expand its domestic market and brand operations. The report adjusts the EPS forecast for 2024-2025 to 0.92 CNY and 1.34 CNY per share, respectively, and introduces a 2026 forecast of 1.70 CNY per share [3][18]. Financial Summary - In 2023, the company reported total revenue of 3.747 billion CNY, a year-on-year increase of 15.37%, and a net profit attributable to shareholders of 233 million CNY, up 120.12% [18][19]. - For Q1 2024, revenue was 878 million CNY, reflecting a year-on-year growth of 24.42%, with a net profit of 56 million CNY, a significant increase of 259.00% [18][19]. - The financial projections indicate total revenue growth rates of 11.3% for 2024, 16.4% for 2025, and 15.2% for 2026, with net profit growth rates of 16.5%, 45.2%, and 26.9% for the same years [19][21].