Investment Rating - The report initiates coverage with a "Buy" rating for the company [2][9]. Core Insights - The company, originating from Denmark, has pioneered and leads the egg processing industry in China, with a strong market position and growth potential [8][21]. - The domestic egg processing ratio is low, currently at 5%-7%, compared to 50% in Japan, 33% in the USA, and 25% in the EU, indicating significant room for market expansion [8][40]. - The company has established a robust quality control system and customer relationships, which are expected to create competitive barriers and drive industry growth [8][12]. Financial Data and Profitability Forecast - Total revenue projections for the company are as follows: - 2024: 906 million CNY - 2025: 914 million CNY - 2026: 1,084 million CNY - 2027: 1,236 million CNY - The expected growth rates are -6.8% for 2024, 0.8% for 2025, 18.6% for 2026, and 14.1% for 2027 [7]. - Net profit forecasts are: - 2025: 94 million CNY - 2026: 112 million CNY - 2027: 130 million CNY - The company’s gross margin is projected to be around 23.8% in 2025, with a return on equity (ROE) of 15.1% [7][9]. Business Overview - The company has four main product lines: liquid eggs, egg powder, prepared egg products, and beverages, with liquid eggs and egg powder accounting for over 90% of revenue [29][30]. - The prepared egg products segment is experiencing rapid growth, while the beverage segment is still in the cultivation phase [29][30]. Market Demand and Growth Drivers - The baking market in China is expected to grow at a CAGR of 7.4% from 2023 to 2029, driven by diverse consumption scenarios [57]. - The restaurant sector is seeing a shift towards more affordable and nutritious ingredients, with eggs being a key component [8][57]. - The C-end market is expanding, particularly among younger consumers who are increasingly health-conscious [8][57]. Competitive Advantages - The company has a high-level, standardized quality control system that covers the entire production process, ensuring food safety [8][12]. - It has accumulated significant customer resources, which are being converted into competitive barriers [8][12]. Investment Analysis - The company is projected to achieve net profits of 0.94 billion CNY in 2025, 1.12 billion CNY in 2026, and 1.30 billion CNY in 2027, with corresponding price-to-earnings (PE) ratios of 24, 20, and 17 [9]. - The target market capitalization is set at 3.2 billion CNY, indicating a potential upside of 45% from the current closing price [9].