Milkground(600882) 交银国际证券·2024-08-29 02:00Investment Rating - The investment rating for the company is Neutral with a target price of RMB 13.40, indicating a potential upside of 12.5% from the current price of RMB 11.91 [1][4][5]. Core Insights - The company is experiencing short-term revenue pressure, and profit growth may not be sustainable. The first half of 2024 saw a revenue decline of 6.9% year-on-year to RMB 1.922 billion, while net profit increased by 71% to RMB 770 million due to lower raw material costs and cost control measures [1][2]. - The cheese business, particularly the ready-to-eat nutrition series, continues to decline, with sales down 6.2% year-on-year. However, the restaurant industrial series showed a growth of 13.8%, partially offsetting the decline [2]. - The company is actively seeking new growth drivers by developing new products and enhancing channel operations, particularly in lower-tier cities and online platforms [2]. Financial Overview - Revenue for 2024 is projected to be RMB 3.892 billion, a decrease of 3.9% from 2023. Net profit is expected to recover to RMB 135 million in 2024, reflecting a significant increase of 112.1% compared to 2023 [3][6]. - The gross margin improved by 1.6 percentage points to 34.6% in the first half of 2024, driven by cost reductions and efficiency improvements [1][2]. - The company maintains a strong market position with over 35% market share in the cheese market and over 40% in the cheese stick market [2].