HUAKANG(605077) 国信证券·2025-02-28 06:55Investment Rating - The investment rating for Huakang Co., Ltd. is "Outperform the Market" [6][28]. Core Views - The company's performance in 2024 saw a year-on-year decline of 27.72% in net profit, attributed mainly to increased management and sales expenses [1][11]. - The new production capacity in Zhoushan is expected to drive the company's performance upward as it gradually comes online [2][28]. - The acquisition of Yuxin Sugar Alcohol is aimed at consolidating Huakang's leading position in the xylitol industry, increasing its domestic market share to 49.6% [3][27]. Summary by Sections Financial Performance - In 2024, Huakang achieved operating revenue of 2.808 billion yuan, a slight increase of 0.93% year-on-year, while net profit attributable to shareholders was 268 million yuan, down 27.72% [1][11]. - The net assets attributable to shareholders increased by 4.98% to 3.243 billion yuan, and total assets grew by 13.18% to 6.992 billion yuan [1][11]. Production Capacity and Projects - The Zhoushan project, which includes a 1 million-ton corn deep processing health food ingredient project, is being developed in two phases, with the first phase already producing certain products [2][28]. - Additional production lines are expected to come online in 2025, which will further enhance the company's revenue potential [2][28]. Acquisition Strategy - The planned acquisition of Yuxin Sugar Alcohol will enhance Huakang's competitive edge in the xylitol market, leveraging synergies in procurement, production, and sales [3][27]. - The acquisition is expected to enrich the product portfolio and improve operational efficiencies across various functions [27][28]. Earnings Forecast - The earnings forecast for 2025-2027 has been cautiously adjusted, with projected revenues of 3.672 billion yuan, 4.356 billion yuan, and 5.009 billion yuan respectively [4][28]. - The expected net profits for the same period are 400 million yuan, 504 million yuan, and 592 million yuan, with corresponding EPS of 1.31 yuan, 1.65 yuan, and 1.94 yuan [4][28].