Incident: On April 24, 2024, Bieasy released its 2023 annual report. In 2023, it achieved revenue of 1,275 million yuan, an increase of 42% over the previous year; realized net profit of -51 million yuan, a year-on-year loss reduction of 59%; and realized net profit deducted from non-mother of -56 million yuan, a decrease of 57% year-on-year losses.
Key points of investment:
Net profit to mother was reversed in 24Q1. In 2023, Beieasy achieved revenue of 1,275 million yuan, a year-on-year increase of 42%; realized net profit of -51 million yuan, a year-on-year reduction of 59%; and realized net profit deducted from non-return to mother of -56 million yuan, a decrease of 57% year-on-year losses.
Among them, Q4 achieved revenue of 333 million yuan in a single quarter, a year-on-year increase of 35%; realized net profit of -35 million yuan, a year-on-year loss reduction of 48%; and realized net profit deducted from non-mother of -34 million yuan, a decrease of 50% year-on-year losses. The Q1 quarter of 2024 achieved revenue of 293 million yuan, a year-on-year increase of 29%; realized net profit attributable to mother of 0.16 million yuan, a year-on-year correction; realized net profit of 16 million yuan after deduction, which was a year-on-year correction. 24Q1 The company's revenue was in line with market expectations, and net profit to mother slightly exceeded expectations.
The revenue of the Douyin channel is growing at a high rate, and offline stores continue to reduce losses. In terms of online channels, in 2023, the company developed the Douyin channel and made a strategic investment in the Douyin channel, and initially formed a strategy to drive “big single products” by introducing traffic from the Douyin channel to other e-commerce platforms and offline direct-run stores. During the year, the company launched a number of new products such as the Neck N5 Mini Shoulder and Neck Massager, Seek See 5K smart eye protector for children, and the Pro Hot and Cold Eye Massager, bringing strong revenue growth momentum to the company. In terms of offline channels, the company continues to adjust the structure of offline direct-managed stores to control expenses. In 2023, the average revenue of the company's offline direct-run stores increased month by month, the cost rate decreased month by month, the profit ratio of stores increased month by month, and overall profit and loss continued to decrease. At the same time, the company made breakthroughs and progress in franchisee channel construction. During the year, the company signed contracts with two provincial retail service providers in Shandong and Jiangsu, officially launched a new business model for provincial retail service providers to join, and strengthen the penetration and development of secondary and tertiary cities and even the sinking market.
Profitability recovered significantly in 24Q1. In 2023, the company achieved a gross profit margin of 59.32%, a year-on-year increase of 9.50 pcts, a year-on-year increase of 53.94%, and a year-on-year increase of 0.10 pcts, mainly due to the high cost investment in the Douyin channel, while the offline channel fee ratio improved. The management/finance expense ratios were 4.25% and 0.29%, respectively, -0.68 and +0.28 pcts year-on-year, and finally recorded a net interest rate of -3.94% in 2023, an improvement of 9.96 pcts year-on-year. The company's profitability was further restored in 24Q1, with gross margin rising to 62.78% and net margin reaching 5.32%, a record high in a single quarter since 22Q1.
Maintain profit forecasts and “gain” investment ratings. We maintain our profit forecast for the company. We expect to achieve net profit of 0.79 million yuan and 115 million yuan in 2024-2025, respectively, and add a profit forecast of 147 million yuan for 2026, which is positive, +44.7%, and +28.2%, respectively. Corresponding to current price-earnings ratios of 36 times, 25 times, and 19 times, respectively, we maintain an “increase in holdings” investment rating.
Risk warning: risk of fluctuations in raw material prices; risk of new product launches falling short of expectations; high sales expense ratio.