The company released its 2024 quarterly report
The company's 24Q1 revenue was 1,353 million yuan, up 4.8%; net profit due to mother was 250 million yuan, a decrease of 2.1%; deducted from non-return mother 235 million yuan, an increase of 6.9%. Non-financial grants were mainly US$19 million from the government (US$50 million in 23Q1).
24 Q1 gross profit margin of 67.8%, up 1.7 pct; net profit margin 19.0%, same decrease of 1.1 pct. The 24Q1 sales/management/ R&D/ finance expenses ratio was 36.1%/6.2%/1.6%/-0.8%, respectively, +1.3/+0.2/-0.1/-0.7pct.
Adhere to the multi-brand strategy
The company adheres to multi-brand, omni-channel, the steady development of mature brands (Huggies, Treasure Bird, Solo), the rapid development of growth brands (Kemiche, Lefeiye), the brand strategy of cultivating brands (Henry Grand, TB, Elliott) at low cost, and moving fast, and continuously promotes the improvement of “product power, channel power, brand power and operation power”, and the principle of “growth priority and profit orientation” to promote high-quality and stable development.
Optimize the channel structure and improve the quality of store operations
The company's brands adhere to the principle of “growth priority and profit orientation”, continuously optimize the incentive mechanism, adhere to offline channels as the core, and promote high-quality development of each brand.
① News Bird promotes the big store plan, upgrade the terminal store image, and close stores with poor image and low performance to improve overall store quality; ② Haggis promotes the implementation of the big store plan to actively expand high-quality franchisees, accelerate channel decline, and expand channel scale; ③ Le Feiye offline has the incremental goal of improving single store performance, controlling discounts online, speeding up product digestion, and optimizing the inventory structure.
Maintain profit forecasts and maintain “buy” ratings
In 2024, the company will adhere to the established strategic goals and strive to do a good job in product research and development, enhance brand image, upgrade channel layout, improve operation and management efficiency, and achieve high quality, stability and sustainable development. We estimate that the company's net profit for 24-26 will be 8.2/9.5/1.1 billion yuan, EPS 0.56/0.65/0.75 yuan/share, respectively, and the corresponding PE will be 11/9/8X.
Risk warning: macroeconomic growth and social consumption sentiment fell short of expectations; brand channel expansion and terminal sales fell short of expectations; industry competition intensified, etc.