CICC: Maintain King's Luck "Outperform Industry" rating, target price 63 yuan

CICC's research report points out that King's Luck has a confirmed trend of increasing market share in Jiangsu Province, with the V3 entering a period of accelerated momentum release, and other products well-positioned across various price points; the market outside Jiangsu is experiencing high growth. The current valuation is attractive. The target price is maintained at 63 yuan, with an "outperform the industry" rating. After years of continuous brand cultivation and the focused operation of the V series division, it is gradually entering a harvest period, with significant sales momentum during this year's Spring Festival, especially in the Nanjing and Huai'an markets, and some momentum in the Yangtai area of Suzhong. King's Luck currently has certain advantages over Yanghe in terms of organizational mechanisms and product life cycles, resulting in channel profits higher than competitors, and consumer cultivation is progressing smoothly. The Guoyuan brand has gradually occupied consumer recognition, and the market share in the province is expected to continue to increase. The company's revenue from the out-of-province market is expected to continue to grow significantly in 2024 and Q1 2025. It is believed that the company's phase of promotion outside the province is necessary to enhance brand strength, and high investment is a necessary choice. At the same time, the strategic direction of product and regional layout outside the province is correct, and the Guoyuan brand is expected to leverage the Jiangsu population in surrounding provinces to open up consumer groups, gradually forming a certain consumption atmosphere in some circles. It is believed that after several years of deep cultivation, the out-of-province market is expected to gradually achieve breakthroughs, opening up the company's long-term ceiling