Incidents:
24-year revenue/net profit +4.3%/-11.8% YoY, 25Q1 -26.4%/-39.8% YoY, Shierjia released the 2024 Annual Report and 2025 Quarterly Report. In 2024, the company achieved operating income of 2.02 billion yuan, a year-on-year increase of 4.3%, net profit to mother of 0.66 billion yuan, a year-on-year decrease of 11.8%, after deducting non-return net profit of 0.6 billion yuan, a year-on-year decrease of 17.0%, and EPS of 1.65 yuan. It plans to distribute cash dividends of 1 yuan (tax included) per share and increase 0.3 shares, with a dividend rate of 60.5%.
On a quarterly basis, 24Q1-Q4 company revenue in a single quarter was +9.7%/+7.1%/+11.9%/-7.3%, and net profit to mother was -4.8%/-2.8%/-5.2%/-30.8% YoY. The 2025Q1 company achieved operating income of 0.3 billion yuan in a single quarter, down 26.4% year on year, mainly due to distribution channel adjustments. Net profit to mother was 91.38 million yuan, down 39.8% year on year, after deducting net profit not to mother of 52.64 million yuan, down 62.8% year on year.
Reviews:
Cosmetics/medical device revenue in '24 was +7.5%/+0.3% YoY, with an increase of 20% online. Looking at offline products, the share of Cosmetics/medical device revenue in '24 was 57.7%/42.3%, and revenue was +7.5%/+0.3% YoY. By channel, the share of online/offline revenue in '24 was 55.0%/45.0% (online share +7.2PCT), and both revenue were +20.0%/-10.1% YoY. Among them, online direct sales/consignment sales and distribution revenue accounted for 49.7%/5.3% (year-on-year +8.8/-1.6PCT, the share of direct sales increased significantly), and revenue was +26.8%/-19.9% year-on-year.
Gross margin fell first, then increased, expense ratio increased significantly, inventory increased, and net operating cash flow decreased gross profit margin: gross margin fell 0.5PCT to 81.7% yoy in '24, and +1.6PCT to 83.0% yoy in 25Q1.
Among them, the gross margin of cosmetics and medical devices in 24 years was -1.0/+0.4PCT to 79.2%/85.2%, respectively, and the online/offline gross margin was -1.7/+0.5PCT to 82.3%/81.0%, respectively.
Expense rate: The cost rate increased 8.8PCT to 38.8% year over year during the 24-year period, +27.2PCT to 60.4% year over year 25Q1. The increase in the cost rate in 24 and 25Q1 was mainly due to business restructuring and the increase in sales expenses ratio.
Other financial indicators: 1) Inventory increased by 30.3% year on year to 0.16 billion yuan at the end of March '25, up 17.7% from the beginning of March '25, and inventory turnover days was 138/307 days in 24-year/25Q1, +8/+151 days year over year. 2) Net operating cash flow was 0.61 billion yuan in 24 years, a year-on-year decrease of 26.2%, and 25Q1 was -66.16 million yuan, which turned into a net outflow from the previous year, mainly due to the continuous increase in promotion and promotion expenses and e-commerce channel expenses.
Performance is under pressure due to business restructuring and increased cost investment. We expect a gradual increase in operating efficiency. Considering the uncertainty of terminal demand and the impact of the company's business restructuring, we lowered the company's profit forecast for 25-26 (net profit reduced by 20%/22% from the previous forecast, respectively) and added a profit forecast for 27 years. The corresponding net profit to mother for 25-27 was 0.63/0.67/0.72 billion yuan, EPS was 1.57/1.68/1.81 yuan, and PE was 20/19/18 times respectively, maintaining the “increase” “Hold” rating.
Risk warning: Improper cost control; weak domestic consumption; e-commerce traffic growth peaked; channel expansion, marketing launch effects, and new product launches fell short of expectations; misunderstanding of changes in industry trends.
