The company achieved operating income of 8.91 billion yuan in 2023, an increase of 39% over the previous year, and achieved net profit of 1.19 billion yuan to mother, an increase of 46% over the previous year. The 24Q1 company's revenue and net profit to mother increased 35% and 46%, respectively, and continued its impressive high growth performance.
By brand, the main brand performed well, and new brands blossomed more. 1) Pereyal brand: Revenue increased 36.4% year-on-year in 2023. In 2023, the Pereyal brand ranked 1st in the essence category on the Tmall platform and continued to lead; ranked 1st in the cream category, ranked 2nd in the mask category, and ranked 5th in the eye cream category. 2) Caitang brand:
Revenue increased 75.1% year-on-year in 2023 and achieved profits. In terms of products, we expect to continue to consolidate the big product strategy and maintain the current top position in the facial makeup industry. 3) Others: In 2023, OR and Yuefti's revenue increased 71.2% and 61.8% year-on-year.
By channel, the online share continues to rise. 1) Online: Online revenue increased 43% year on year in 2023, with direct sales and distribution increasing by 50.7 and 16.5%, respectively. We expect each platform to focus on slightly different operating directions. The Tmall flagship store will deepen the big single product matrix strategy and strengthen refined operation; the Douyin channel will strengthen global operations and optimize the distribution structure; and the JD channel will strengthen the core strategy of large single products and improve product layout. 2) Offline: Revenue increased 7.35 year on year in 2023, with daily chemical channel revenue up 11.6% year on year.
By category, revenue from skincare, beauty and cosmetics, and toiletries increased by 37.9%, 48.3%, and 71.2%, respectively, year-on-year in 2023.
Considering the excellent performance of 24Q1, we believe that the company is expected to continue to achieve excellent growth this year and look forward to the 618 promotion in the short term. The company continues to implement the big single product strategy, and the multi-brand strategy has also successfully secured many high growth tracks. In terms of products, in 2024, in addition to the existing product line, we think we can focus on the performance of the main brand's sunscreen category and the strength of the Caitang brand's makeup category. We can also look forward to the company's overseas business development in the medium to long term.
According to the annual report and quarterly report, we adjusted the profit forecast and introduced the 2026 profit forecast. The company's earnings per share for 2024-2026 are $3.84, 4.84, and 5.9 yuan (originally $3.74 and $4.73 for 2024-2025), and the DCF target valuation is 137.06 yuan, maintaining a “buy” rating.
Risk warning: industry competition intensifies, terminal consumer demand weakens, new product expansion falls short of expectations, etc.