Angel Yeast（600298）：2Q24 Earnings Beat； Operating Performance Improved Qoq

EquityResearchReport AngelYeast(600298CH) 華泰金融控股（香港）有限公司 2Q24EarningsBeat;OperatingPerformanceImprovedQog HuataiResearchInterimResultsReviewRating(Maintain):BUY 13August2024|China(Mainland)FoodTargetprice(RMB)38.39 AnalystGONGYuanyue 2Q24earningsbeat;operatingperformanceimprovedqoq AngelYeast's1H24revenue/attributebleNP/recurringattributableNPwere SACNo.E0570523100001SFCNo.BQL737 woosuanluen/buce +(86)2129972228 RMB7,180/690/600mn(+6.9/+3.2/-2.5%yoy)andfor2Q24wereRMB3,700/370/300mn(up11.3/17.3/7.3%yoy),beatingourestimates(2Q24revenue/attributable Keydata NP:up8/6%yoy).For1H24,domestic/overseasrevenuerose0.9/17.9%yoytoTargctprice(RMB)38.39 RMB4.31/2.82bn.For2Q24,domesticbusinessimprovedqoq,whiletheoverseas Closingprice(RMEasof12Aug) 30.87 armmaintainedhighgrowth.Owingtoademandrallyintheyeastmainbusiness, increasingpenetrationofsupportingproducts(ie,YE),risingsalesofyeastprotein, Potontiaiupside-/+(%)24 Mktcap(RMEmn)25,816 andsustainedgrowthintheoverseasmarket,weexpectthecompanytoresume Emavgdalyvat(RMBmn) 255.36 growthmomentum.Forprofit,withdippingmolassespricesathomeandabroad,weseereducedcostpressuresubsequently.Weestimate2024/2025/2026EPSat 52akpricerange(RME)27.88-36.73 BVPS(RMB)11.72 RMB1.60/1.80/2.07,andvaluethestockat24x2024EPE,inlinewithitspeers'averageonWindconsensus.OurtargetpriceisRMB38.39.BUY. Shareperformance 2Q24:domesticdemandonthemend;overseasexpansionsustained(%) 4 ArgelYeastCSI300 For1H24,revenuefromyeastanddeepprocessingproducts/sugar/packaging/ otherschangedby+8.8/-26.5/-12.8/+30.8%yoytoRMB5.12/0.59/0.2/1.24bn,with (2)-1 yoychangesof+12.2/-40.1/-17.1/+46.4%for2Q24,Byproduct,small-packege (s) productperformanceshone,mainlyowingtothelowbaseandamoderatereboundinhouseholdconsumptionamiddivergingconsumptiontrendsin2024; YEcontinuedtogrowfast,underpinnedbyrobustdemandfrominternationalclients;AngelNutritechsawreducedlossesin2Q24asitfocusedonkeyproducts; (15) (21) Aug-23Dec-23Apr-24Aug-24 thecompanygraduallydivesteditssugarbusiness. Sourcc:Wind 2Q24GPMroseyoy:bullishonsustainedprofitmarginrally The1H24GPMdipped0.3ppyoyto24.3%,whilethatfor2Q24rose0.3ppyoyto23.9%,whichweattributetofasterrevenuegrowthforthehigh-margin small-packageproductovertheoverallbusiness,aswellasfallinghydrolyzed sugarcosts.Withdecliningmolassespricesathomeandabroad,weseereduced ratiosrose0.1/0/0.4ppyoyto5.2/3.4/0.2%(2Q24:+0.6/-0.3/+0.6ppyoyto +5.5/+3.1/-0.1%). Bullishonsustainedoperationrecoveryinthefuture;maintainBUY Upbeatonademandrallyathome,increasedmarketshareafterthecapacity ramp-upabroad,aswellasthebocstfromtheequityincentiveplan,weliftour earningsforecasts,andproject2024/2025/2026EPSatRMB1.60/1.80/2.07(previous:RMB1.53/1.70/1.96).OurtargetpriceisRMB38.39.BUY. Risks:fluctuationsIInraw-materialprices;softmacroeconomicperformance; food-safetyissues. Financials YE31Dec 2023 2024E 2025E 2026E (e)eneg 12,843 13,581 14,989 16.629 18,384 /-% 20.31 5.74 10.22 11.08 10.43 Netproit(RMBrmm) 1.321 1,270 1,380 1.565 1,788 +% 6'0 (3.86) 9.43 12.58 14.98 EPS(diltec,RMB; 1.562 1,68 1.60 180 2.07 ROE(%) 14.04 12.38 11.98 11.92 11.84 PETX) 19.47 20.25 18.51 16.44 14.30 PB(x) 278 2.55 2.26 200 1.78 EVEBITDA(x)12.8813.35 11.83 10.48 8.04 Source:Companyannguncements,Huata:Researchestimales 1 ThisreportmustbereadwithimporfantdisciosuresandanaiystcertificaticnsJocotedonfheendofthereport. AngelYeast(600298CH) 華泰金融控股（香港）有限公司 Fig.1:AngelYeastPE-BandsFig.2:AngelYeastPB-Bands (RMB)(RVB) AngelYeas: AngelYeast 7295 54-40x=-7.7x 30x 3647 6.4x 25x5.0x 1820x243.7x 15x2.4x Aug-21Feb-22Aug-22Feb-23Aug-23Feb-24Aug-21Feb-22Aug-22Feb-23Aug-23Feb-24 SouroeWindHuatafReseediSo,rce:Wind,HuataiResesrdh 2 This/eportmxustbereadwithimportanfdisclasuresandanalystcsitifications/ocstedon.theendafthereport. AngelYeast(600298CH)idh 華泰金融控股（香港）有限公司 Fullfinancials Balanceshieet Incomestaterment YE31Dec(RMBmn) 2022 szoz 2024E 2025E 2026E YE$1Dec[RMBmn) 2022 2023 2024E 2025E 2028E Currentassets 5.667 8,209 9,385 10,271 12.022 Revenue 12,843 1.3,581 14,969 16,629 Cssh&equivslents 1821 1,19) 2,118 2,103 3.706 Ogerstingcosls 8,658 ez0: 11,312 12,463 Accnur1renivables 1,583 1,547 1,003 1,529 2,303 Businesaes&surdtarges 93.34 106.54 129.71 Otherreceivables 25.09 194.99 47.59 221.90 75.7C Ogeratingexpenses 729.73 9*202 881.35 Prrprymarts 233.48 621.78 st0.45 501.88 384.15 Admincopnnees 523.92 615.28 Imventories 3.007 3,818 3,681 4,580 4.624 5500(3(2UsU) 5.85 15.79 62.29 29.27 Othsrcientasseis 527.72 1,035 1,035 1,35 1,035 Assetimpamentlosses (59.63) (39.47) (43.50) (68.32) Non-currentassets 10.263 11,061 11,284 11,581 11.85C Pfromfairvaluechanges 3.00 (so0) (0.01) (t00) Lorg-lorminvesiment 24.88 86'1z 17.05 12.11 7.18 Investrentincome 5.25 (2.04) (2.04) (2.04) Fisdirvestmen 7.066 8.615 8,044 9,423 9.710 1.581 1,539 1,856 1870 spseseagifbueu] 609.69 663:10 711.81 772.43 833.64 Non-operatinginoome 15.07 27.00 19.60 8.70 Othorrnon-cirr.assets 2.562 1,761 1.511 1,273 1.299 Non-operatingexpenses 4.14 9.41 8.41 9.41 Totalassets 16.93C 19,270 26,873 21,952 23.872 tgoad(mo1 1,5