The company released its annual report for the year 23 and the quarterly report for the year 24
24Q1 revenue of $30 billion, a decrease of 4.5%; net profit attributable to mother of $25 million, a decrease of 32.9%; net profit after deducting non-attributable net profit of $23 million, a decrease of 35.1%; gross profit margin of 59.0%, or 0.5 pct. The slight decline in gross margin was mainly due to an increase in the share of online businesses with relatively low gross margins.
24Q1 achieved cumulative store write-off revenue of 14.3965 million on Douyin's local lifestyle platform, a decrease of 54.6%. As an e-commerce platform, Douyin grew strongly at the beginning of its launch, and product sales grew rapidly. Currently, the growth rate has declined, but it has remained steady.
After excluding Douyin's local lifestyle business, 24Q1's revenue was 280 million, up 1.3% year over year, and the business remained stable.
23A's revenue was $1.18 billion, up 22.2%; net profit of $130 million, up 68.9%; net profit without return to mother of $120 million, up 82.9%; gross profit margin of 63.1%, up 1.2pct; 23Q4 revenue of $270 million, up 17.0%; net profit to mother of $0.3 billion, up 11.6%; net profit after deducting net profit of $23 million, up 2.3%; gross profit margin of 70.60%, same increase of 1.8pct.
In 2023, the company plans to distribute a discovery dividend of 105 million yuan (tax included), with a dividend rate of 81.7%; by 23A product, revenue from optical glasses and fitting services was 792 million yuan, up 20.91%, gross profit margin 71.0%, and 0.9 pct; among them, frame sales also increased by 48.44%; lens sales also increased by 41.18%.
The revenue of the Chengjing series products was 159 million yuan, an increase of 56.33%; the gross profit margin was 48.7%, a decrease of 3.4 pcts; among them, sales of sunglasses increased 30%; sales of reading glasses also increased by 12.9%.
The revenue of contact lens series products was 164 million yuan, up 12.32% from the same period, and the gross profit margin was 40.2%, up 3.7 pcts.
Among them, sales volume of invisible care solutions also increased by 31.20%, mainly due to increased online promotion.
In 24Q1, the company's gross profit margin was 59.0%, a decrease of 0.5 pct, mainly due to the increase in the share of online business with relatively low gross margin, which disrupted the company's overall gross margin. At the same time, the company adopts sales strategies such as optimizing the product structure, and the promotion of private brand products and functional lenses with relatively high gross margins will increase the gross profit margin by a certain margin.
24Q1's net profit margin was 8.5%, down 3.9 pct. The main reason was that the sales expense ratio increased by 3.3 pct over the same period last year. The main reason was that the company attracted more outstanding talents to further expand its business and improve quality and efficiency.
In 2023, the company opened 51 new stores, of which 50 were directly managed and 1 joined; 49 were closed, of which 47 were directly managed and 2 joined. By the end of 2023, the company had 515 stores, including 495 direct-run stores and 20 franchise stores.
Explore new retail marketing models and connect online and offline
The company continues to promote the upgrading and optimization of the online platform membership system, actively cultivate new members through promotion activities such as node marketing and new product launch, steadily maintain old members, optimize member rights with added value, provide high-quality after-sales service in a timely manner, and enhance customer stickiness and repurchase rates.
The company actively embraces the Internet ecosystem. It has set up official accounts for brand communication and product promotion on mainstream social platforms such as Weibo, Douyin, and Xiaohongshu, and has set up official stores on e-commerce platforms such as Tmall and Jingdong to guide consumers to go to offline stores to complete consumption transformation. With the rise of the short video delivery trend, the company's Douyin store launched a regular live broadcast to continuously raise brand attention while achieving standardized eyewear product sales.
In 2023, the company's online GMV 2 billion yuan, corresponding revenue (excluding tax) was 180 million, accounting for a total of 15.6% of the company's revenue, an increase of 45%; of these, Douyin GMV was 23.29 million, an increase of 213.9%.
Optimize and upgrade product structures to meet diversified consumer needs
The company has always attached importance to product system construction, and has adopted a strategy of combining international brand agents and private brand development to strengthen product advantages in the field of eyewear retail. At present, the company has established long-term strategic partnerships with many well-known global eyewear manufacturers such as Carl Zeiss, Kering Group, Eshiro, LVMH, etc., to continue to provide consumers with trendy global eyewear products, and through joint cooperation and exclusive agents with major trendy brands, the company designs traditional glasses into fashion items that are more in line with current consumer aesthetics, bringing consumers more diverse and personalized choices. At the same time, the company actively cultivates its own brands and continuously upgrades and iterates its own brand product matrix.
Update profit forecasts and maintain buying ratings
As a leader in the eyewear retail industry, the company's market share has been in a leading position in the industry for many years. In 2024, the company will further improve the sales channel layout, increase market share and in-store conversion rate; focus on diversified visual needs and increase the penetration rate of functional lenses. According to the 23 annual report and the quarterly report for '24, we updated our profit forecast. Net profit due to mother for 24-26 is estimated to be $1.58 billion ($168/207 million, respectively, 24-25 years ago), and the corresponding PE is 16/14/12X, respectively.
Risk warning: Consumption power is weak, industry competition intensifies, and business development falls short of expectations.