Fuling Zhacai(SZ:002507) EBSCN·2024-04-28 02:02Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected investment return exceeding 15% over the next 6-12 months [9][12]. Core Insights - The company is focusing on the recovery of demand for its core products and expanding its product categories. Successful category expansion could unlock growth potential [3][10]. - The first quarter of 2024 saw a slight decline in revenue by 1.5% year-on-year, but net profit increased by 3.9% year-on-year, indicating improved cost control [10][19]. - The company plans to stabilize growth in its core pickled vegetable category while exploring new product lines such as "pickled vegetable+" and ready-to-eat meals [3][20]. Financial Performance - In Q1 2024, the company achieved revenue of 750 million yuan, with a gross margin of 52.11%, down 4.17 percentage points year-on-year. The average purchase price of raw materials decreased to 800 yuan per ton from 1100 yuan per ton in the previous year [10][19]. - The sales expense ratio improved significantly, decreasing by 5.63 percentage points to 12.21%, primarily due to reduced marketing and branding expenses [19]. - The net profit margin reached 36.29%, an increase of 1.91 percentage points year-on-year, reflecting enhanced profitability despite revenue challenges [19]. Market Data - The current stock price is 13.02 yuan, with a total market capitalization of 15.024 billion yuan and a total share count of 1.154 billion shares [5][6]. - The stock has experienced a trading range between 11.60 yuan and 19.82 yuan over the past year [6]. Future Projections - The company forecasts net profits of 925 million yuan, 1.028 billion yuan, and 1.129 billion yuan for 2024, 2025, and 2026, respectively, with corresponding EPS of 0.80 yuan, 0.89 yuan, and 0.98 yuan [12][21]. - The projected P/E ratios for 2024, 2025, and 2026 are 16x, 15x, and 13x, respectively, indicating a favorable valuation outlook [12][21].