Investment Rating - The investment rating for the company is "Buy" (maintained) with a current price of 60.45 CNY and a target price of 72.60 CNY [1]. Core Views - The company reported a significant decline in performance due to a downturn in the agricultural chemical industry, with a 21% year-on-year decrease in revenue for 2023, totaling 11.5 billion CNY, and a 45% drop in net profit to 770 million CNY [2][3]. - Despite the challenges, the company is accelerating the promotion of its high-margin Model C business, which has increased its revenue share from 26.71% in 2022 to 33.82% in 2023, contributing to a slight increase in overall gross margin [3]. - The company is actively investing in the North American and European markets, with a budget of approximately 40 million USD for regulatory approvals in 2024, expecting to start seeing returns from 2026 [4]. Financial Performance Summary - In Q1 2024, the company achieved a revenue of 2.7 billion CNY, a 21% increase year-on-year, while net profit decreased by 16% to 150 million CNY [2]. - The gross margin for Q1 2024 improved to 20.10%, up 1.35 percentage points year-on-year, driven by the increasing share of Model C revenue, which reached 37.17% [3]. - Revenue projections for 2024-2026 are estimated at 13.6 billion CNY, 15.9 billion CNY, and 18.3 billion CNY, respectively, with corresponding growth rates of 18%, 17%, and 15% [5]. Valuation and Earnings Forecast - The forecasted net profits for 2024-2026 are 1 billion CNY, 1.2 billion CNY, and 1.5 billion CNY, with growth rates of 31%, 21%, and 23% respectively [5]. - The company is assigned a target PE ratio of 20 times for 2024, leading to a target price of 72.60 CNY [5].
景气低迷致业绩承压，高毛利业务模式加速推广