2023 年经营改善，业绩扭亏为盈。公司全年实现归母净利润1.9—2.45亿元，扭亏为盈。其中，Q4 实现归母净利润区间为0.94—1.49 亿元，同比增长327.3%—577.3%；全年实现扣非归母净利润2—2.6 亿元，同比增长257.1%—364.3%。其中，Q4 实现扣非归母净利润区间为0.55—1.15 亿元。公司持有的金融资产公允价值变动损益预计为-1.1~ -0.85 亿元，同比减少约45%。公司主业盈利能力显著改善，非经常性损益影响下降。Incidents:
[Business Administration Blfa E_Bu Sum20M2A3RY] According to the performance forecast, net profit attributable to mother is expected to be between 190 and 245 million yuan, and net profit without deduction of 200 to 260 million yuan.
Comment:
Operations improved in 2023, and results turned losses into profits. The company achieved net profit of 1.9 to 245 million yuan for the whole year, turning a loss into a profit. Among them, Q4 achieved net profit range of 0.94 to 149 million yuan, a year-on-year increase of 327.3% to 577.3%; net profit without deduction for the whole year was 200-260 million yuan, an increase of 257.1% to 364.3% over the previous year. Among them, Q4 achieved a net profit range of 0.55 to 115 million yuan that was not deducted from mother. Profit and loss from changes in the fair value of financial assets held by the company is expected to be -1.1 to -85 billion yuan, a decrease of about 45% over the previous year. The profitability of the company's main business improved significantly, and the impact of non-recurring profit and loss decreased.
The results of brand renewal, product rejuvenation, and channel upgrading continue to be prominent. Since 2020, the company has refocused and recovered its brand, and is committed to becoming the “No. 1 brand of men's pants in China”. 1) On the product side, we focus on the men's pants category and launch scenario-based products such as business series and outdoor leisure series, mainly promoting sales of popular products. The market feedback for products such as “small black pants” and “easy pants” is good. Product rejuvenation and improvement results are obvious; 2) On the channel side, the company continues to promote store transformation and optimization, closing 59 to 2,385 stores by 2023Q3. The “Tenth Generation Store” has been implemented smoothly. The newly opened stores have excellent location selection and youthful decoration, which can also attract young consumers, and the effect of improving store efficiency is remarkable; 3) On the marketing side:
From 2020 to 2022, we will launch brand rejuvenation and enhance consumer awareness through international catwalks and large-scale advertising. In 2023, we will focus more on precise marketing, achieve efficient marketing through live broadcasts, celebrity talents, department store events, etc., and improve the efficiency of spending.
Profitability has increased, and there is sufficient cash on the account. The company's gross margin increased due to factors such as the narrowing of terminal discounts due to the increase in brand power and the increase in the share of direct management. There is plenty of cash on the account. As of 2023Q3, the company had cash of 1,075 million yuan and transactional financial assets of 580 million yuan.
Investment advice: As a leading brand of men's pants in China, we are optimistic about its brand recovery. With continuous product and channel upgrades, terminals will continue to grow at a high rate and seize more market share. It is expected that profit elasticity will be further unleashed in the future. The company's revenue from 2023 to 2025 is expected to increase 17.54%/20.09%/16.81% to 30.8/36.98/4.32 billion yuan, and net profit to mother will reach 226/3.36/406 million yuan, corresponding to the current stock price of 10.87 yuan and a valuation of 28/19/15 times, maintaining its “buy” rating.
Risk warning: Consumption recovery falls short of expectations, store expansion and transformation falls short of expectations, new product development falls short of expectations, profit forecasts and valuations fall short of expectations, etc.
