Summary event: In 2022, the company achieved a GMV of 26.485 billion yuan, a decrease of 2.27% over the previous year; operating income of 1,539 million yuan, an increase of 35.55% over the previous year; and the mother's net profit was 180 million yuan, a decrease of 44.9% over the previous year.

Q4 2022 achieved revenue of 523 million yuan in a single quarter, an increase of 28.96% over the previous year; the net profit of the mother was 33 million yuan, down 73.11% from the previous year. In Q1 2023, the company achieved a cumulative GMV of 2,724 million yuan, an increase of nearly 6% over the previous year; operating income of 279 million yuan, an increase of 4.60% over the previous year; and Guimu's net profit was 43 million yuan, a decrease of 17.86% over the previous year.

The short-term profit side was affected by multiple factors and declined somewhat. The company's overall gross margin in 2022 was 33.59%, a year-on-year decrease of 14.02pct, mainly due to factors such as a decline in the share of high-margin business, changes in exchange rates, and increased investment in new brands. In Q1 2023, the company's gross margin was 34.30%, down 9.82 pct from the previous year.

This is mainly due to an increase in the share of low-margin businesses.

The customer matrix is growing steadily. In Q1 of '23, the company added 12 brands including C&D Group (4 brands), Swisse, Luanshi, Gaojiangsu, Comfort, etc. on the basis of ensuring the basic stability of high-quality stock customers. The growth of GMV in the food and jewelry categories has further verified the company's feasibility of expanding from beauty to other categories. At the same time, due to the current reduction in overweight, the company's refined operation, marketing, and creative service capabilities have continued to rise in weight in the general environment of decentralization and decentralization.

The general agency business broke down and focused on technology research and development iteration. Against the backdrop of a slowdown in the growth rate of shelf e-commerce, the company tried to break the game through general agency business and received good results. General agency businesses such as Hairmax and Xinji Makeup will continue to be added in 2022, and additional brands will further enhance the performance growth brought about by the general manager business. Furthermore, in line with the strategy of “Global E-commerce Service Provider New Consumer Brand Accelerator”, the company completed a global adaptation iteration of existing digital tools and expanded the data dimension and depth of data projects. At the same time, the company plans to apply artificial intelligence related technology in 23 to promote cost reduction and efficiency.

Investment advice: We expect the company's EPS to be 1.24, 1.47, 1.74 yuan/share from 23 to 25, and the latest stock price corresponding to PE is 24.3/20.4/17.3 times, maintaining the “buy” rating.

Risk warning: consumption recovery falls short of expectations; industry competition intensifies; digital upgrading falls short of expectations