Fuling Zhacai(002507) 西南证券·2024-09-02 06:13Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a revenue of 1.31 billion yuan for the first half of 2024, a year-on-year decrease of 2.3%, and a net profit attributable to shareholders of 450 million yuan, down 4.6% year-on-year. The performance was below market expectations [1] - The core business of pickled vegetables showed stable growth, while revenue from radishes faced significant pressure due to reduced promotional investments. The company actively managed channel pricing and optimized its distributor network, reducing the number of distributors by 424 to 2,815 [1] - The cost benefits began to show in Q2, with a gross margin of 50.9% for H1 2024, down 2.2 percentage points year-on-year, but Q2 gross margin improved to 49.2%, up 0.3 percentage points year-on-year, attributed to the use of lower-cost raw materials [1] - The company continues its dual expansion strategy focusing on market and product category growth, with plans to enhance the distribution of its key product, pickled vegetable sauce, and expand into compound seasonings [1] Financial Summary - For H1 2024, the company achieved revenues of 1.12 billion yuan from pickled vegetables, 130 million yuan from pickled cabbage, 20 million yuan from radishes, and 30 million yuan from other products, with respective growth rates of +0.5%, -6.2%, -39.4%, and -25.9% [1] - The company expects EPS for 2024-2026 to be 0.73 yuan, 0.79 yuan, and 0.86 yuan, with corresponding dynamic PE ratios of 16x, 15x, and 14x [1][3]