KINGLAI MATERIALS(SZ:300260)2024-05-07 13:30Investment Rating - The report assigns a rating of "Accumulate" to the company, down from "Buy" [1] Core Views - The company's revenue showed steady growth in Q4 2023 and Q1 2024, with Q4 2023 revenue at RMB 735 million, a QoQ increase of 4% and YoY increase of 17%. The gross margin was 26.8%, with a QoQ increase of 1.1 percentage points but a YoY decrease of 5.4 percentage points [4] - The food business of the company maintained robust growth in 2023, with revenue of RMB 1.718 billion, a YoY increase of 28%. The gross margin for this segment was 21.8%, a YoY increase of 1.5 percentage points [4] - The pharmaceutical business experienced a significant decline in 2023, with revenue of RMB 315 million, a YoY decrease of 43%. This decline is attributed to a high sales base from 2022 due to health and epidemic factors [4] - The semiconductor-related business faced challenges, with revenue of RMB 662 million, a YoY decrease of 7%. However, a rebound is expected in 2025 as the semiconductor industry recovers [4] Financial Summary - The company’s projected EPS for 2024, 2025, and 2026 are RMB 0.78, RMB 1.07, and RMB 1.35 respectively. As of May 6, 2024, the total market capitalization is approximately RMB 10.3 billion, corresponding to PE ratios of 32.2, 23.6, and 18.6 for the respective years [4][10] - The company’s revenue is projected to grow from RMB 2.711 billion in 2023 to RMB 3.243 billion in 2024, reflecting a growth rate of 19.6% [11] - The net profit is expected to recover from RMB 236 million in 2023 to RMB 319 million in 2024, with a growth rate of 35.3% [11]