High profit growth, multi-brand and multi-channel resonance. The company released a performance forecast for the first half of 2024:24H1 achieved operating income of 3.4-3.6 billion yuan (+114.3%-126.9%), with a median of 3.5 billion yuan (+121% YoY); net profit of 0.39-0.41 billion yuan (YoY +286.1%-305.9%), and a median value of 0.4 billion yuan (YoY +296%); net interest rate of about 10.8%-12.1%.

Despite the lack of government tax rebates, the US achieved a high increase in performance, mainly due to the rapid growth of Han Shu's multi-channel sales and the sharp increase in the performance of Newpage, a high-end second-curve infant care brand.

The main brand is strong, and the secondary brands are emerging. Han Shu's main brand achieved a GMV of 3.449 billion yuan in the first half of the year, leading the gap; Newpage has strong reputation and customer stickiness, and we expect annual revenue to exceed 0.4 billion yuan; An Minyou focuses on artemisinin sales points, targets sensitive skin, cooperates with Kunming Pharmaceutical, and has a high repurchase rate and profit margin, and is expected to generate more than 0.15 billion yuan in annual revenue. The company is making every effort to clean and maintain the track, use horse racing with excellent managers, and focus on polishing product quality. It is expected that there will be breakthroughs in the future. The company has an excellent core, heavy investment in R&D assets, a dual R&D supply chain platform between China and Japan, self-development+cooperative two-wheel drive to ensure stable and efficient production and product quality, and rich and forward-looking basic raw materials, formulations and product reserves. We look forward to the company's richer product layout and the explosion of brand categories under the flexible mechanism in the second half of the year.

Strengthening Douyin, reinventing Tmall, and returning offline, Han Shu's “White Man Waist” package and toiletries category are gaining momentum. We are optimistic about the rise of big single products in the second half of the year, and the old brands will be renewed. In '24, Han Shu used the Hongman Waist Pack to promote the Bai Man Waist Pack to focus on whitening. We expect the white man waist ratio to increase to 15%. Cyclic hexapeptide-9 is endorsed by many academic authorities, and it is expected that the second half of the year will highlight the advantages of large single products. Traditional brands replicated Han Shu's successful methodology to restore performance, and the Ichiyo and Red Elephant brands were renewed.

New brands such as One Page, An Minyou, and 2032 continued to grow.

Multi-brands and omni-channels take advantage of the momentum and continue to drive growth. Benefiting from the current cost-effective consumption environment, the domestic import substitution trend, the US is actively laying out cleaning and other tracks, has rich product and talent reserves, and has a high revenue ceiling. The company's 24-26 revenue is expected to be 6.861/8.847/10.528 billion yuan, +64%/+29%/+19% YoY; net profit to mother is 0.925/1.24/1.507 billion yuan, +101%/+34%/+22% YoY. The corresponding EPS is 2.32/3.12/3.79 yuan/share, and the corresponding PE is 15/11/9 times, maintaining the “buy” rating.

Risk warning: Consumption falls short of expectations, changes in market demand, increased industry competition, rising raw material prices, declining traffic on advantageous platforms, etc.