The company released its 2023 annual report and 2024 quarterly report
The company's 24Q1 revenue was 749 million yuan, up 12.5%; net profit due to mother was 29 million yuan, a decrease of 38.3%; deducted 30 million yuan from non-return mother, a decrease of 26.4%.
The company's 23Q4 revenue was 850 million yuan, an increase of 30.9%; net profit to mother was 0.31 million yuan, an increase of 49.8%; and withheld from non-return mother - 47 million yuan, an increase of 29.4%.
Revenue in '23 was $2,915 million, up 21.7%; returning to mother of $106 million, up 416.6%; withholding non-return of 80 million yuan, up 1515.1%. Reasons for changes in revenue: ① As the business environment returns to normal within 23 years, the company's multi-brand matrix collaborates to drive revenue growth. ② Growing brands seize good opportunities for domestic market expansion to expand efficiently, which helps to continue to grow revenue. ③ The company's online multi-brand and multi-platform strategy has achieved good results, and online sales revenue has increased.
The company plans to distribute a cash dividend of 87 million yuan (tax included), with a dividend rate of 82.63%.
By sales channel, offline sales revenue in '23 was 2,486 billion, up 23.5%; gross profit margin was 71.1%, up 5.7pct; online sales revenue was 393 million yuan, up 12.0%; gross profit margin was 56.3%, down 2.3 pct.
By store type, direct revenue in '23 was 2,398 billion yuan, up 23.9%; gross profit margin was 71.7%, up 4.7 pct; franchise revenue was 480 million yuan, up 12.2%; gross profit margin was 55.9%, up 3.2 pct.
By the end of '23, the company had a total of 652 stores, a net increase of 39, including 504 direct-run stores, a net increase of 44.
The gross profit margin in '23 was 67.8%, up 4.0pct; the net profit margin was 5.6%, up 3.2pct.
Sales/ Management/ Financial/ R&D expenses were 46.1%/8.3%/0.6%/2.5%, respectively, -1.3pct/-1.0pct/-0.8pct/+0.3pct. Changes in sales expenses are mainly due to an increase in revenue, an increase in direct-run stores, and an increase in labor costs, store expenses, advertising expenses, etc. Changes in financial expenses are mainly due to lower interest expenses on current loans and exchange losses due to exchange rate changes. The change in R&D costs is mainly due to an increase in the company's product development projects in the current phase, and the shift of working hours of relevant personnel to R&D expenses.
The multi-brand matrix has achieved breakthroughs in the domestic market, and the digital transformation company's strategy of increasing investment in long-term development has achieved good results. Sales of newly opened stores have been effectively increased, and cost control has been further optimized, which has enabled the company's domestic business profit to rise sharply, exceeding the same period in 21 years. The company adopted a multi-brand and multi-platform online development strategy, achieved comprehensive breakthroughs online, and expanded high-quality offline stores efficiently. During the growth period, the brand seized good development opportunities in the domestic market, and achieved a rapid increase in the number of stores in a relatively short period of time. Continue to improve and strengthen the traffic matrix composed of ambassadors, virtual digital people, official accounts, celebrities, and celebrity bloggers, VIP, VIC, and KOS terminal shopping guides to comprehensively amplify brand volume through public and private domains, and effectively channel traffic to e-commerce platforms and terminal stores.
The company continues to deepen the construction of an omni-channel digital management system, open up brand data, and achieve cross-brand and cross-channel data interaction. Through the launch of the Dharma membership management system, the company has built a group-level member management system, generated member portraits and corresponding marketing interaction strategies through data backflow analysis, achieved global content management and reach on social platforms such as WeChat through automated engines, and finally built a closed loop of multi-brand digital omnichannel marketing.
Adjust profit forecasts to maintain “buy” ratings
The company's business model is mainly a retailer model specializing in self-owned brands and acquired brands. It focuses on design and development, procurement, production, sales and marketing, and emphasizes effective control over material procurement, product planning, production and sales. A marketing system adapted to the high-end multi-brand matrix has been created, which flexibly covers various online and offline platforms and channels, and forms an obvious synergy effect on the brand promotion side. Considering the pressure on the company's 24Q1 performance and the decline in online gross margin, we adjusted our profit forecast. The company's net profit for 24-26 is 2.41/3.15/379 million yuan respectively (previous 24-25 years were 308/351 million yuan, respectively), EPS was 0.65/0.85/1.03 yuan/share, respectively, and the corresponding PE was 12/9/7X, respectively.
Risk warning: Risk of declining performance due to adverse changes in the external market environment; risk of failure to accurately grasp fashion trends; risk of products being counterfeited and illegally purchased online; risk of declining traffic dividends from traditional e-commerce channels and unfavorable expansion of new e-commerce channels, etc.