ZUO LI YAO YE(300181) 东吴证券·2024-07-30 23:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative price increase of over 15% in the next six months [16]. Core Insights - The performance of medicinal slices exceeded expectations, with significant sales growth in products like Wuling capsules and Lingze tablets, showing year-on-year increases of 28.86% and 30.84% respectively. The sales revenue for traditional Chinese medicine slices increased by 57.11% year-on-year in the first half of 2024, reaching 389 million yuan [1]. - The company plans to repurchase shares, demonstrating confidence in its development. The repurchase price will not exceed 20 yuan per share, accounting for 1.43% to 2.14% of the total share capital, which is expected to enhance employee motivation through a long-term incentive mechanism [2]. Financial Performance Summary - In the first half of 2024, the company reported total revenue of 1.428 billion yuan, a 41% increase year-on-year, with a net profit attributable to shareholders of 296 million yuan, up 49.8% [7]. - The operating cash flow for the first half of 2024 was 215 million yuan, reflecting a 75% increase year-on-year, indicating strong operational efficiency [8]. - The company’s net profit margin improved to 20.45%, with a decrease in sales expense ratio to 34.19%, attributed to cost reductions following centralized procurement [8]. Earnings Forecast and Valuation - The forecast for net profit attributable to shareholders for 2024-2026 has been adjusted upwards to 5.8 billion, 7.1 billion, and 8.6 billion yuan respectively, with corresponding PE ratios of 17, 14, and 12 [16].