The 2024Q1 revenue growth rate exceeded expectations, and the overseas business growth rate was impressive. Maintaining the “Buy” rating company's latest business situation for the first quarter of 2024 (unaudited), the company's revenue is expected to increase by 40-45% in 2024Q1, its domestic business revenue will increase by 20-25%, and overseas business revenue will increase by 245-250%. We maintain our profit forecast. We expect the company's net profit for 2024-2026 to be 14.5/18.6/2.35 billion yuan, corresponding to EPS of 1.1/1.4/1.8 yuan, and the current stock price corresponding to PE 29.1/22.7/17.9 times PE. I am optimistic that the company's overseas expansion will continue in 2024. The second growth curve path is clear, and the “buy” rating will be maintained.
Domestic channel split: Omni-channel growth continued, Douyin channels maintained a high growth rate on the domestic side. 2024Q1's retail store revenue increased 20-25% year on year, robot store revenue increased 15-20% year on year, e-commerce and other online platforms overall increased 20-25% (of which Douyin channel increased 95-100%, bubble boxer channel increased 0-5%, Tmall flagship store increased 0-5%), wholesale and other channels grew 50-55%. According to Jiuqian Zhongtai, as of the end of March 2024, the number of Bubble Mart domestic stores was 413, an increase of 20 compared to the end of 2023. Recently, LABUBU's joint name with Lucky and Bubble Mart's Wang Jia Er have further raised awareness among young people. We are optimistic that the company will continue to grow steadily in the number of retail stores and store efficiency and the accelerated recovery of online platforms under the recovery of the general environment.
The growth rate of overseas channels exceeded expectations, and international IP going overseas accelerated to shape the second growth curve 2024Q1. The company's overseas business revenue increased by 245-250%. In terms of overseas stores, the number of overseas retail stores of Bubble Mart at the end of 2023 was 80 (including joint ventures), an increase of 37 compared to the end of 2022. The ratio of overseas stores between east and west in 2023 was 7:3. The company recently entered Galeries Lafayette in Paris, France, further boosting the awareness of overseas consumers. In terms of international IP, the LABUBU vinyl series is popular in Southeast Asia. Lisa's Labubu (green grapefruit) was sold out of stock in Thailand, and IP popularity continues; overseas artists IPCRYBABY and Riot Betty performed well in Thailand and the US. We are optimistic that as the company's international IP expansion accelerates, the DTC strategy will further shape the company's second growth curve.
Future outlook: The domestic omnichannel system continues to improve, and overseas markets accelerate expansion. Looking ahead to 2024, we expect the company's revenue to grow by more than 30%, with overseas business revenue increasing by more than 100%.
On the domestic side, we are optimistic that by further improving the omni-channel system, the company will accelerate the sinking market layout and optimize stores to achieve a sharp increase in the number of retail stores and store efficiency. On the overseas side, we are optimistic that the expansion of the company's overseas stores will accelerate, entering countries such as Indonesia, Vietnam, and the Philippines. It is expected that the ratio of East-West stores will increase to 6:4 in 2024. Structural optimization of overseas stores is expected to drive further improvement in store efficiency.
Risk warning: Risk of insufficient overseas market expansion, macroeconomic risk, IP matrix risk.