Incident: The company disclosed its 2024 quarterly report. Q1 achieved revenue of 1.91 billion yuan, -3.8% year-on-year, realized net profit of 260 million yuan, +11.2% year-on-year, and realized net profit of 290 million yuan after deduction of non-return to mother, +29.2% year-on-year, and profit exceeded expectations. Non-recurring profits and losses are mainly losses of 48.63 million yuan due to fair value changes in financial assets and financial liabilities held by the company in the current period.
The gross margin has increased, and the cost ratio is well controlled. (1) The company focuses on categories with high gross profit, high growth rate, and high brand premium. Q1 gross margin was +2.1pp to 63.3% year-on-year. (2) The company continued to optimize expenses. During the Q1 period, the cost ratio was -4.5 pp to 46.2% year on year, with sales expenses ratio -3.5 pp to 37.2% year on year, and management expenses ratio -2.6 pp to 6.5% year on year. (3) The Q1 company's net interest rate to mother was 13.4%, +1.8pp year on year, and 15.4% net profit margin after deducting non-return to mother was 15.4%, +3.9pp year on year.
According to the company's official WeChat account, in terms of the company's official WeChat account, Baicaoji Q1's traditional e-commerce sales were +49%, Tmall GMV was +119% compared, and Douyin GMV was +41% during the promotion period; Yuzawa 38 joined hands to open “Yuze Dream Protect Self-Healing Station” in five major cities in China, and launched a new medical dressing with recombinant type 3 humanized collagen as the core ingredient; Shuangmei Q1 achieved a three-digit high sales growth, and co-branded with Guan Xia to launch Department Store No. 475 Strong perfume, selected in the Tmall Fragrance New Product List in the same month; new physical sunscreen was launched Little Yellow Hat achieved good sales performance. In terms of the Personal Care Home Cleaning Division, the sales volume of Meijiajing's Q1 increased by about 44% year over year; Liushen Shangxin third-generation pistol pump spray mosquito repellent flower dew, and sales exceeded 270,000 bottles in the same month.
Profit forecast and investment suggestions: The company continues to promote strategic transformation, setting up a beauty and skin care division, a personal care division, and an overseas division. The division is responsible for performance results, focuses on categories with high gross profit, high growth rate, and high brand premium, and continues to improve the quality of operations. The company's net profit for 24-26 is estimated to be 6.2, 7.3 million yuan, and 82 billion yuan, respectively, keeping the view that the company's reasonable value is 25.44 yuan/share unchanged, corresponding to 28 times PE in 24, maintaining the “buy” rating.
Risk warning: The decline in optional consumption sentiment has led to a decline in industry growth; industry competition has intensified; new product expansion falls short of expectations.