The company released its 2024 quarterly report: 2024Q1 achieved operating income of 765 million yuan, +46.40% year on year; realized net profit of 103 million yuan, an increase of 28.07% year on year; realized net profit after deduction of 98 million yuan, an increase of 30.63% year on year.
Freedom Point's contribution is outstanding, and e-commerce channels continue to unleash high growth rates. In the first quarter of 2024, the company continued to focus on sanitary napkin series products. Among them, Liberty Point products achieved revenue of 701 million yuan, an increase of 54.6% over the previous year. At the same time, the revenue share of high-end series products increased. Big Health's middle and high-end product revenue was faster, and the company's product structure was further optimized. The gross margin of 2024Q1 Freedom Point products reached 57.7%, +5.8 pct year on year.
In terms of channels, 2024Q1's offline channels achieved revenue of 436 million yuan, +16.7%, with revenue from provinces other than the core region +52.0%; e-commerce channels achieved revenue of 296 million yuan, an increase of 150.5% over the previous year. In terms of breakdown, the 2024Q1 Douyin platform accounted for about half of e-commerce revenue, Tmall accounted for more than 20%, and Pinduoduo accounted for about 10%. All three e-commerce platforms achieved three-digit growth.
We believe that the company has achieved rapid revenue growth, mainly because the company has a certain competitive advantage in product upgrades and iterations, marketing model innovation, team motivation and motivation, etc., and it is expected that the future will rely on relevant barriers to continue to unleash growth. For example, for probiotic series products, the company will continue to optimize the product structure and upgrade and iterate the probiotic product line to expand the advantages of probiotic products; the company will continue to optimize the marketing system and focus on offline regional market coverage through online platform promotion to form complementary online and offline advantages and multi-channel collaborative development; at the same time, on the basis of drawing on the successful promotion experience of probiotic series products, the promotion paths and methods of the company's different product lines will be different.
Profit forecast and rating: We expect the company to achieve net profit of 2.99, 3.65, and 440 million yuan in 2024-2026, with a year-on-year increase of 25.3%, 22.2%, and 20.6%. The current closing price is 34 or 28 times PE in 24-25. As a leading enterprise in the field of personal cleaning and care, the company is referred to as giving the company a PE valuation of 35 to 36 times in 2024, corresponding to a reasonable value range of 24.32 to 25.01 yuan. The corresponding PEG is 1.38 to 1.42 times, giving a “superior to the market” evaluation grade.
Risk warning: There is a risk of fluctuations in raw material prices, and channel promotion falls short of expectations.