Core views:
The company issued a pre-profit announcement for the 2024 semi-annual results. It is predicted that 24H1 will have revenue of 2.62 billion yuan, or -1.32% of the year; net profit due to mother will be 3.15 to 0.378 billion yuan. In the same period last year, 23H1 estimated debt of 1.747 billion yuan resulted in net profit attributable to mother -1.443 billion yuan, and 24H1 turned a loss into a profit.
24H1 net profit without return to mother was 0.306-0.368 billion yuan, +3.38% to 24.32% year-on-year. Looking at Q2 alone, 24Q2 revenue was 1.135 billion yuan, -11.88%; net profit to mother was 0.76 to 0.139 billion yuan, turning a loss into a profit; net profit not attributable to mother was 0.069-0.131 billion yuan, or -54.6% to -13.8% year-on-year.
24Q2: Demand in the industry is weak and fresh reforms continue, and the company's performance is under pressure in the short term. On the revenue side, it is predicted that revenue from the condiment business decreased slightly compared to the same period last year, corresponding to the 24Q2 condiment subsidiary's revenue of about -10% year-on-year, mainly due to: (1) Q2 was affected by rainy weather, etc., weak terminal demand, company channels removed inventory, and industry competition intensified; (2) Q2 companies implemented hierarchical dealer management, and internal and channel reforms were still ongoing, affecting revenue fluctuations in the short term. On the profit side, the net interest rate center for 24Q2 was 8.81%, down 2.99pct year-on-year, mainly due to: (1) the cost of raw materials in Q2 is still falling, but gross margin is expected to remain basically flat month-on-month due to the scale effect of the decline in revenue; (2) the decline in profit margins is expected to be mainly affected by the increase in cost ratios, and increased cost investment due to increased competition, advertising, and channel reforms in the Q2 industry.
Profit forecasting and investment advice. Excluding land acquisition compensation revenue of 0.296 billion yuan in 2024, compensation for 169 acres of land, mergers and acquisitions, and minority share recoveries, the estimated 2024-2026 revenue is 5.476/6.227/7.111 billion yuan, up 6.55%/13.72%/14.19% year-on-year; net profit to mother of 0.725/0.919/1.114 billion yuan, a year-on-year change of -57.30%/+26.85%/+21.18%.
In 2024-2026, Delicious Fresh's revenue is expected to be 5.322/6.115/7.032 billion yuan, up 7.91%/15.00% year on year; net profit to mother is 0.7/0.912/1.107 billion yuan, up 24.96%/30.33%/21.43% year on year. The 2024 valuation of Delicious Fresh PE was 20 times; the real estate business had a reasonable value of 3 billion yuan and a reasonable value of 21.70 yuan/share, maintaining the purchase rating.
Risk warning. The industry's boom fell short of expectations. The reforms fell short of expectations. Channel expansion fell short of expectations.