23Q4 performance is under phased pressure. 24Q1 revenue and profit have improved markedly, with 23 year revenue of 5.522 billion yuan/yoy 10.14%, and net profit of 757 million yuan/yoy -28.02%. 23Q4 revenue was 2,091 million/yoy -1.31%, with net profit of 178 million/yoy -66.74%, mainly dragged down by the Double 11 promotion; 24Q1 revenue yoy 1,0097 million/yoy 27.06%, and net profit to mother of 177 million yuan/yoy 11.74%, which has improved markedly from month to month. After the company experienced a low performance in 23Q4, 24Q1 revenue growth has accelerated markedly. On the brand side, Winona has advanced sensitive skin PLUS 2.0 from Shu Min, and many new products can be expected; on the channel side, Tmall's growth rate is expected to warm up, and Douyin's growth is also expected to accelerate, driven by new products in 24 years. EPS is expected to be 2.95/3.94/4.68 yuan in 24-26, compared to the company's 24-year Wind's consistent profit forecast 27 times PE. Due to the high stickiness barrier on sensitive skin tracks, 30 times PE is given for 24 years, and the target price is 88.50 yuan (maintenance) to maintain the “buy” rating.
Online and offline channels have penetrated each other, gradually forming multi-platform sales network sub-channels. In '23, online channel product revenue was 3,552 billion yuan/yoy -0.37%, of which 2,712 billion yuan/yoy 0.65% was self-operated, and distribution/consignment sales were 840 million yuan/yoy -3.54%. Offline channel product revenue was 1,427 million yuan/yoy 48.87%, of which OTC channel was 816 million yuan/yoy 66.08%. OMO channel product revenue was 523 million yuan/yoy +10.30%, of which Winona's counter service platform generated 485 million yuan/yoy 4.94%, and offline self-operated at 37.83 million yuan. By platform, Ali is 1,762 million yuan/yoy -14.46%, Douyin 631 million yuan/yoy 47.14%, JD 374 million yuan/yoy 5%, and Vipshop 307 million yuan/yoy 1.61%. The company builds a complete marketing matrix and establishes a matrix-style communication platform.
Investment and M&A Expansion Ecosystem Map
In '23, the company acquired 51% of Yuejiang Investment's shares. Yuejiang Investment's 23-year revenue was 548 million yuan/yoy 76.66%, which was a net profit of 43.1 million yuan/net interest rate of about 7.86%, slightly lower than the performance promise target of RMB 50 million, mainly due to the fact that sales of the Double 11 online promotion campaign were generally lower than expected, some key products from Za and Pomei were out of stock, and some product upgrade costs were slightly higher. Contributed to consolidated statement revenue of 104 million yuan/net profit of about 8 million yuan. Revenue and net profit for 23 years were lower than the performance assessment targets set during the first vesting period of the 2023 Restricted Stock Incentive Plan, so 249 first-time incentive recipients were scrapped with 1.378,500 restricted shares that were awarded but could not be attributed during the first vesting period. After this annulment, the incentive plan granted 249 incentive recipients for the first time. The total number of restricted shares that have been granted but not yet owned is 3,216,500.
The company's profitability was under pressure in '23, and the expense ratio was high for the period
In '23, the company's gross profit margin was 73.90% /yoy-1.31pct, and the net profit margin was 13.75% /yoy -7.20%. The cost ratio for the 23-year company period was 59.77%, including sales expenses ratio of 47.26% /yoy+6.41pct, management expenses rate 7.48% /yoy0.64pct, R&D expenses rate 5.41% /yoy0.33pct, and financial expenses ratio -0.39% /yoy-0.1pct.
Risk warning: Increased industry competition, concentrated sales platforms, seasonal fluctuations.