Event: In 2023, the company achieved revenue of 21,528 billion yuan (+15.98% YoY), net profit to mother of 2,952 billion yuan (+36.96% YoY), and the dividend ratio increased to 91.11%. The company achieved revenue of 6.177 billion yuan (+8.72% YoY) and net profit to mother of 887 million yuan (+10.41% YoY) in 2024 Q1.
The main brand performed brilliantly. Hai Lan House/Group Buying/Other brands had revenue of 164.58/22.81 billion yuan in 2023, +19.66%/+1.48%/+5.85%, 2024Q1 revenue of 51.30/5.50/371 million yuan, +6.46%/+54.21%/-25.07% YoY. The main brand continued its steady performance. Fluctuations in the group buying business growth rate were related to the pace of shipments. The decline in other brands in 2024Q1 resulted in the separation of boys and girls.
Online channels are growing steadily, and offline direct sales continue to be developed. In 2023, the company's online revenue was 3.258 billion yuan, +14.06% year-on-year, accounting for 15.70%. 2024Q1's online revenue was 847 million yuan, +34.00% year-on-year.
The number of main brand stores increased net by 34 to 5976 in 2023, with a net increase of 198 to 1,252 direct-run stores. The proportion of direct-run stores increased from 17.74% at the beginning of the year to 20.95%, and there were certain adjustments in franchise channels. The net increase in direct-managed/franchised stores of the main brand of 2024Q1 was 15/-37 to 1267/4687.
The increase in the share of direct sales channels led to an increase in gross margin. In 2023, the company's gross margin was 44.47%, +1.58pct, sales/management/R&D expense ratio 20.22%/4.47%/0.93%, +1.77/-0.49/-0.12pct, 2024Q1 company gross margin was 46.69%, +2.11pct, sales/management/R&D expense ratio 18.97%/5.24%/0.83%, +2.70/ -0.54/+0.01pct. The increase in gross margin and the share of direct sales channels It's about promotion.
Investment advice: The company's main brand has maintained a leading position in the industry. E-commerce, overseas, and new brands bring new growth drivers. The medium- to long-term growth path is clear, the company's operation is steady, and high dividends are attractive. We expect 2024-2026 net profit of 32.96/38.20/4.302 billion yuan, corresponding to PE 13.3/11.5/10.2X, to maintain the “gain” rating.
Risk warning: Risk of fluctuations in the retail environment; risk of same-store growth falling short of expectations; new brand cultivation falling short of expected risk.