According to the official account of Baiya Co., Ltd., Liberty Point products received Douyin Double 11's cumulative sales top 1 in the women's care industry, top 2 in the Tmall women's care category transaction competition list, and top 2 in the Jingdong women's care POP store. Channel GMV increased 130%, 90%, and 90%, respectively.

E-commerce platforms with Double 11 advantages remain in the lead, and the national expansion logic continues to be implemented

Freedom Point products received Douyin Double 11's cumulative sales top 1 in the women's care industry, top 2 in the Tmall women's care category transaction competition list, and top 2 in the Jingdong women's care POP store. The channel GMV increased by 130%, 90%, and 90%, respectively. In addition, the distribution channels of Pinduoduo, Tmall and Taobao increased by 100%, 110%, and 110% year-on-year respectively, and the sales volume of the Super Single Probiotic Pro during the Double 11 period exceeded 8.6 million packs. Under the company's multi-pronged approach, Douyin continues to maintain its leading ranking and continues to break through other Pintai rankings, mainly due to: 1) the company successfully created the probiotic health series and continuously promoted product iteration; 2) reasonable talent recruitment, team building, and incentives; 3) continued investment in platform resources and continuous iteration of play styles, thus achieving rapid growth. 24Q1-3's revenue achieved a beautiful growth rate. By channel, 1) E-commerce channel 24Q1-3 revenue was 1.039 billion yuan, up 140.1% year on year; 24Q3 revenue was 0.385 billion yuan, up 96.8% year on year, and continued to accelerate from month to month. 2) Offline channel 24Q1-3 revenue was 1.197 billion yuan, up 24.1% year-on-year. Among them, revenue for provinces outside the core region increased 73.8% year on year; 24Q3 revenue was 0.386 billion yuan, up 25.6% year on year.

Among them, the revenue of provinces outside the core region increased 91.0% year over year. The company will continue to increase resource investment in e-commerce and offline channels to promote the company's development from the regional to the national market.

Q3 High-end products drive an increase in overall gross margin and increase in brand channel cost investment

In terms of profitability, 24Q1-3's gross margin was 54.88%, up 5.87 pct year on year; 24Q3 company's gross margin was 55.80%, up 4.20 pct year on year. The share of revenue from high-end products continues to increase, while at the same time driving a continuous increase in profit levels. The gross profit margin of 24Q1-3's Liberty Point products was 57.8%, up 4.1pct year on year; 24Q3 company's free point product gross margin was 58.1%, up 2.7 pct year on year.

In terms of period expenses, the 24Q1-3 company's expenses rate for the period was 42.86%, up 8.99pct year on year. Sales/management/R&D/finance expenses rates were 37.41%/3.40%/2.17%/-0.11%, respectively, +9.63/-0.15/-0.61/+0.12pct, respectively. The 24Q3 company's expense ratio was 48.01%, up 8.22pct year on year, and the sales/management/R&D/finance expenses ratio was 41.51%/4.34%/2.21%/-0.05%, respectively, +7.32/+1.26/ -0.62/+0.27pct, respectively. 24Q1-3 invested 0.87 billion yuan in sales expenses, up 112.1% year over year. 24Q3 sales expenses increased by 82.9% year-on-year to 0.33 billion yuan. The continuous increase in sales expenses is mainly due to Double Eleven promoting preheating and water storage and the promotion of new Probiotic Pro products. There is a large investment in brand and channel expenses and resources.

Under the combined influence, the net interest rate of the 24Q1-3 company was 10.26%, down 2.12 pct year on year; the net interest rate of the 24Q3 company was 7.42%, down 2.21 pct year on year.

Investment advice: Baiya Co., Ltd. has been deeply involved in the field of personal care for many years. It continues to promote product structure optimization, rapid channel and regional expansion, and invigorate new e-commerce channels. It is expected that its market share will continue to increase in the future. We expect the 2024-2026 operating income of Baiya Co., Ltd. to be 3.105, 3.991, and 5.055 billion yuan, up 44.82%, 28.53%, and 26.67% year-on-year; net profit to mother will be 0.319, 0.41, 0.52 billion yuan, up 33.95%, 28.42%, and 26.94% year-on-year, corresponding PE will be 34.5x, 26.9x, 21.2x, and given a target price of 30.48 yuan for 24, maintaining the buy-A investment rating .

Risk warning: Market competition is increasing risk; risk of large fluctuations in raw material prices; risk of new channels and regional expansion falling short of expectations.