Incident: The company disclosed its 2024 semi-annual results. In 2014, H1 achieved revenue of 0.187 billion yuan +15.16%; net profit to mother 0.029 billion yuan, +20.68% year over year; net profit after deducting non-return to mother 0.027 billion yuan, or 24.7% YoY. Among them, 24Q2 revenue was 0.096 billion yuan, +15.58% year over year; net profit to mother was 0.016 billion yuan, +20.37% year over year; net profit after deducting non-return to mother was 0.015 billion yuan, +24.82% year over year.
The main business is growing steadily, and R&D continues to be strengthened in a variety of categories. By product, 24H1 sauce sauce/powder sauce/food additive achieved operating income of 0.148/0.038/0.0001 billion yuan, respectively, +20.74%/-1.36%/-43.27%, respectively. Single 24Q2 Company's revenue for sauce seasonings/powder seasonings/food additives was 0.075/0.02/0.0004 billion yuan, respectively, +25%/-10%/-54%. More than 1,800 products were sold in the first half of the year, and sales of new products developed in the past three years accounted for more than 50%. Among them, more than 400 new products were added to the sauce category, more than 140 new products were added to the powder category, and 16 new products were added to retail terminals. At the same time, the company actively lays out product development and channel cooperation in the field of prepared dishes and baking to broaden the business matrix.
The catering channel performed well, consolidated the original market share, and actively developed potential customers. By channel, 24H1 Catering/Food Processing/Brand Customization/Direct Market/Direct E-Commerce/Dealer (Retail) achieved revenue of 0.91/0.64/0.25/0.0001/0.005 billion yuan, respectively, +26.23%/+7.95%/-11.74%/+48.21%/-18.83%, and 24Q2 Catering/Food Processing/Brand Customization/Direct E-Commerce/Dealer (retail) achieved revenue of 0.43/0.30 respectively /0.14/0.0005/0.0007/0.0029 billion yuan, +37.94%/-2.21%/+14.77%/-14.47%/+23.26%/-40.04%, respectively. The company further deepens cooperation with existing customers by promoting new products, actively expands downstream customers, and continues to expand cooperation with well-known domestic and foreign restaurant chains and brand retail companies with advantages such as its own products, R&D and channels. At the same time, the company actively lays out online platforms, and direct-managed e-commerce has also achieved relatively rapid growth. By region, 24Q2's revenue in East China, North China, Northeast China, Central China, South China, and other regions was 0.68/0.13/0.04/0.005/0.004/0.001 billion yuan, respectively, +19%/3%/+10%/+4%/+60%/-15%, respectively, and achieved growth in multiple regions.
Profitability continues to be optimized, and net interest rates are rising steadily. 24Q2's gross margin/net margin was 38.05%/16.54%, respectively, -2.49/+0.66pct year on year. The decline in gross margin was mainly due to factors such as product restructuring and rising raw materials. Sales/management/R&D/finance expense ratios were 6.96%/7.84%/3.35%/0.68%, respectively. The year-on-year ratio was -1.21/-1.52/-0.44/0.12pct, respectively. The cost ratio continued to be optimized. Among them, the reduction in management expenses was mainly due to a year-on-year decrease in share payment fees.
On the product side, with leading R&D capabilities, we will continue to deepen the research and development of compound condiments to meet various consumer groups while seizing the opportunities of prepared dishes and ready mixes for baking, which is expected to bring new momentum for growth. In terms of channels, we use R&D advantages and brand advantages to expand cooperation with restaurant chains, increasing market share; deepening cooperation with major domestic and foreign food industry companies; and actively developing C-side businesses. Along with a steady decline in costs and improvements in expenses, the company's profitability is expected to increase steadily.
Profit forecast: We expect the company to achieve revenue of 0.431/0.525/0.635 billion yuan in 24-26, achieve net profit of 0.072/0.09/0.113 billion yuan, PE of 32.60/26.07/20.78x, respectively, with a recommended rating.
Risk warning: The recovery of the restaurant industry falls short of expectations, food safety risks, and the risk of rising raw material prices.