CICC released a research report sayingbaccaratsetof4, maintain Yihai International's (01579)"outperform the industry" rating, and its 2024 and 2025 profit forecast remains unchanged. Taking into account the upward market valuation, the target price has increased to HK$18. In response to the rapid changes in consumer demand in recent years, the company continues to actively promote organizational changes. Its product research and development direction has shifted to being driven more by consumer demand. It will also promote sales incentives and expand channels based on changes in the consumption environment, so that sales growth in some markets such as Northeast China and South China has improved.
The bank quoted industry data as saying that Yihai's third-party business performed well thanks to the Lunar New Year's stocking, while growth declined from April to May under the influence of a high base. However, the overall performance is still stable and it is expected that organizational changes will be effective. It is expected that the third party's performance will improve significantly this year. As for the performance of related parties, the turn-over rate has performed well year-to-date. CICC currently expects that the annual revenue of related parties is also expected to achieve good growth. In terms of profitability, CICC predicts that Yihai's gross profit margin is expected to rise steadily and the rates will be relatively stable in 2024. The growth rate of net profit after deducting non-current items may be slightly faster than revenue performance. Net profit may be adversely affected by foreign exchange. Volatility, the impact may be relatively limited throughout the year.
