CCGB(SZ:300138) Huaxin Securities·2024-04-25 01:30Investment Rating - The report maintains a "Buy" investment rating for the company [13]. Core Views - The company's plant extraction business shows steady performance, while the cottonseed business faces pressure due to market conditions. However, the long-term return on the cottonseed business is still viewed positively [13]. - The first quarter of 2024 saw total revenue of 1.732 billion yuan, a decrease of 5% year-on-year, with a net profit of 39 million yuan, down 71% year-on-year. The decline is attributed to the cottonseed business and changes in the fair value of derivatives [27]. - The company is expected to benefit from economies of scale, which will help reduce costs and improve profitability in the long run [27]. Summary by Sections Financial Performance - In Q1 2024, the company's plant extraction revenue was 762 million yuan, with a gross profit of 138 million yuan, reflecting a slight year-on-year increase and a 1% decrease respectively [1]. - The cottonseed revenue was 840 million yuan, down 12%, with a gross profit decrease of 122 million yuan [1]. - The overall gross margin for Q1 2024 decreased by 5 percentage points to 8.21% due to lower cottonseed prices and a higher proportion of low-margin products [27]. Product Performance - The main products in the plant extraction segment maintained stable revenue, with significant growth in sales of certain products like capsicum red and lutein [1]. - The company is expanding its product range and enhancing product value through customized offerings, which is expected to drive profit growth in the future [1]. Future Earnings Forecast - The forecast for earnings per share (EPS) for 2024-2026 is 0.61, 0.99, and 1.32 yuan respectively, with corresponding price-to-earnings (PE) ratios of 15, 9, and 7 times [13].