Incident: The company released its quarterly report for '24, achieving revenue/net profit attributable to mother/net profit of 3,587 million yuan/103 million yuan/103 million yuan, respectively, compared with +1.72%/+58.90%/+81.72% year-on-year, respectively. The first quarter was off to a good start, and the growth after deducting non-profit exceeded our expectations.

The off-season revenue growth rate slowed, leaving no change to the high growth in performance. The company's 24Q1 revenue was +1.72%, which is slower than the previous growth momentum. It is expected to be mainly affected by factors such as the high base effect. As the high base effect weakens in the second quarter, it is expected that the company's revenue will continue to perform well during the peak consumption season.

Gross profit margin has increased steadily, operating costs have been effectively controlled, and reform dividends have continued to be released. Although the revenue growth rate was slow, the sharp increase in performance was mainly due to increased gross margin, control of operating costs, and optimization of income tax rates.

24Q1, the company's net profit margin was +1.03pct to 2.86%. According to the attribution: (1) gross margin +0.4pct to 37.2%, which is expected to benefit from the increase in tonnage price and cost reduction; (2) the cost ratio for the period -0.61pct to 24.64%, of which: the four cost rates of sales/management/R&D/finance were -0.57/-0.21/-0.06/+0.23pct to 11.93%/11.76%/1.90%/-0.95%, reflecting the continuation of the company's management and cost control level Increase; (3) Actual income tax rate - 7.3pct to 21.41%. Considering the vigorous reform work carried out by the company's management, the gradual implementation of net interest rates, and the fact that there is still plenty of room for improvement compared to the industry's net interest rate level, we expect the company's profit level to continue to grow at a high growth rate.

Profit forecast: We expect the company to achieve revenue of 156.3/170.0/18.31 billion yuan respectively in 24-26, net profit to mother for the corresponding period of 9.2/11.6/1.37 billion yuan, and corresponding EPS of 0.32/0.41/0.48 yuan respectively, maintaining the company's “buy” rating.

Risk warning: The high-end process falls short of expectations, risk of fluctuations in raw material prices, food safety risks.