Cathay Pacific Haitong: Maintaining October Rice Field (09676) “Gain” Rating Target Price of HK$18.48
The Zhitong Finance App learned that Cathay Pacific Haitong released a research report stating that it maintains the October Rice Field (09676) “gain” rating. The bank expects the company's 2025-2027 EPS to be 0.55/0.68/0.82 yuan, giving the company 25xPE in 2026, corresponding to a target price of HK$18.48 (at 1HKD=0.92 CNY).
Cathay Pacific Haitong's main views are as follows:
Structure upgrade, share increase
There is no logic of total volume in the rice industry as a whole, but as a low-customer unit price category with high demand and high frequency, there is still a certain increase in high-end rice under structural upgrades, and the packaging rate of the industry and the proportion of high-quality products continues to rise. Low entry barriers, weak brand attributes, and scattered channels have led to an overall fragmented and fierce competition pattern, and industry concentration is also increasing slowly. Among them, middle and high-end card brands can achieve faster growth because they have certain brand barriers and relatively sufficient profit margins to mobilize upstream and downstream resources. The bank is optimistic about the ability of rice fields to continue to increase its share in October in the future. Based on the comprehensive advantages of the brand, supply chain, channel and marketing that the company has been deeply cultivated and established over many years, it will become strong and strong.
The high efficiency of the whole link creates the first brand
The company has set up an efficient supply chain in scarce geographical indication production areas such as Wuchang City. Direct upstream procurement guarantees the quality and price advantages of raw materials, and D2C sales and order-based production ensure excellent product freshness. With the comprehensive support of strong product strength, strong channel strength, and excellent marketing capabilities under a high brand tone, we finally achieved a repurchase rate significantly higher than the industry average, creating the number one brand for middle and high-end rice.
Omni-channel layout, strong operational efficiency
The company's tight grip on online channel dividends has achieved a significant leading market share. Thanks to the establishment of a flat organizational structure and flexible channel group combat model, it can formulate marketing strategies according to local conditions. Online growth is expected to continue to grow steadily in the future due to increased dividends, sales through emerging channels such as Pinduoduo instant retail, and sales of new categories such as corn. With regard to the broad offline channels, with the support of a high brand tone and an efficient supply chain, supermarkets, direct customers, and distribution channels have all achieved rapid growth, and the share of revenue continues to rise. In the future, offline channels are expected to continue to grow rapidly with the exploration of Sam and NKA, the encryption and sinking of LKA and distribution channels, and the abundance of categories.
Expand categories and open up new spaces
The company has a clear path and successful experience in promoting new products. The explosion of corn has proven the power of brand, channel, and marketing reuse. Corn is under short-term pressure without changing its long-term potential, and is expected to return to relatively rapid growth in the future, driven by new products such as corn syrup packs and offline channels. In the future, with the launch of more new products such as rice from the South, it will open up more room for growth.
Risk warning: weak demand, poor market expansion, fluctuations in raw materials, etc.