Core views:
The company's 2023 performance recovered at an inflection point after the pandemic. According to the company's 2023 annual report, the company's revenue in 2023 was 2,915 billion yuan, up 21.73% year on year, net profit to mother was 106 million yuan, up 416.56% year on year, and net profit after deducting non-return to mother was 80 million yuan, up 1515.12% year on year.
According to the company's investor relations activity schedule, the company achieved net profit attributable to shareholders of listed companies of 225 million yuan in 2023, regardless of the impact of goodwill impairment preparations and trademark impairment preparations, an increase of 1000% over the previous year. The company plans to pay a cash dividend of $2.40 for every 10 shares.
The company's 2024Q1 performance was weighed by the impact of overseas business. According to the company's 2024 quarterly report, 2024Q1's operating income was 749 million yuan, up 12.47% year on year, net profit to mother was 0.29 million yuan, down 38.25% year on year, net profit after deducting 30 million yuan from year on year, down 26.38% year on year, mainly because although the company's domestic revenue increased by about 20% year on year, overseas regions continued to be affected by macroeconomic factors such as inflation and geographical situation, and the company's overseas business losses increased significantly compared to the same period last year. Furthermore, due to additional current equity incentive fees in the first quarter of 2024 (last year) None during the same period), and the investment income contributed by Baiqiu Shang Mei decreased due to the reduction in subsidies.
I am optimistic that the company's 2024 results will improve quarterly. First, the company's 2023 base was high and low. The company's IRO Paris brand's overseas business performance has been greatly impacted since 2023. Second, the company's 2023Q4 accrued goodwill impairment. Second, while the domestic business revenue of the 2024Q1 company grew, the net operating profit of the domestic business increased compared to the same period last year. Third, the company's international brands are expanding through domestic channels. In 2024, the company is expected to maintain a similar expansion rate as in 2022 and 2023. Finally, the company will shut down Loss-making stores and cost optimization reduce the extent of losses, and gradually reduce and reverse losses in overseas businesses.
Profit forecasting and investment advice. In 2024-2026, the company's EPS is expected to be 0.58 yuan/share, 0.80 yuan/share, and 1.03 yuan/share. Referring to the company's average PE range over the past five years, 15 times PE was given in 2024, with a reasonable value of 8.70 yuan/share, maintaining the “buy” rating.
Risk warning. The risk of multi-brand operation, changing trends, and poor terminal demand.