折扣控制带动毛利率提升，投资收益影响净利润。1H24 公司毛利率同比+2.4ppt 至66.1%，主要因公司严格控制终端折扣并提高直营占比。费用方面，1H24 销售费用率同比+7.2ppt 至41.6%，主要因广告及业务宣传费同比+4,035 万元，以投放至不同年龄层的消费客群；管理/研发费用率相对稳健，分别同比-2.9ppt/-0.1ppt 至6.2%/1.5%。此外，1H24 公允价值变动同比-0.28 亿元。总体来看，1H24 归母净利率同比-3.4ppt 至3.2%，扣非净利率同比-1.7ppt 至8.1%。营运方面，截至1H24，存货同比+6.4%至8.34亿元，存货周转天数同比+13 天至299 天。1H24 经营活动现金流净额同比-79.3%至0.5 亿元。1H24 results are in line with our expectations
The company announced 1H24 results: revenue of 1.576 billion yuan, +12.50% year on year; net profit to mother 0.05 billion yuan, -45.88% year on year; deducted non-net profit of 0.128 billion yuan, -7.28% year over year. Among them, 2Q24 revenue was 0.636 billion yuan, +1.18% year-on-year; net profit attributable to mother was 0.058 billion yuan, after deducting non-net profit - 0.071 billion yuan. The gap between deduction and return of funds is mainly due to changes in fair value brought about by financial assets. The company's overall performance was in line with our previous expectations.
The main brand has grown steadily, and some franchised stores have switched to direct management. By brand, 1H24's main brand Jiumuwang/FUN/ZIOZIA's revenue was +15.0%/-10.2%/-2.5% to 1.43/0.06/0.06 billion yuan, and the number of stores was -14 home/-18 home/-3 to 2,183 home/76 home/92 compared to the beginning of the year, respectively. Among them, 2Q24 main brand revenue was +3.2% year-on-year. By channel, 1H24 direct/franchise/online channels were +34.7%/-0.5%/-8.5% to 0.76/0.59/0.15 billion yuan, respectively. The number of direct-managed/franchised stores was +10 home/-45 to 801 home/1,550 compared to the beginning of the year, mainly because the company switched some franchised stores to direct management.
Discount control drives up gross margin, and investment income affects net profit. 1H24's gross margin was +2.4ppt to 66.1% year-on-year, mainly due to the company's strict control of terminal discounts and increasing the proportion of direct operations. In terms of expenses, the 1H24 sales expense ratio was +7.2ppt to 41.6% year over year, mainly due to advertising and business promotion expenses of +40.35 million yuan year over year to target consumers of different age groups; management/R&D expenses were relatively stable, with -2.9pp/ -0.1ppt to 6.2%/1.5%, respectively. Furthermore, the 1H24 fair value change was -0.028 billion yuan year over year. Overall, 1H24 net profit margin was -3.4ppt to 3.2% year on year, after deducting non-net interest rate -1.7ppt to 8.1% year over year. In terms of operations, as of 1H24, inventory was +6.4% year over year to 0.834 billion yuan, and the number of inventory turnover days was +13 days to 299 days year over year. 1H24 net cash flow from operating activities was -79.3% YoY to 0.05 billion yuan.
Development trends
On the product side, the company plans to: 1) continue to focus on top products. We estimate that 1H24 “five pants” account for 29% of total pants sales; 2) strengthen the matching of pants and tops; 3) increase popular price products to meet rational consumption trends. In terms of channels, the company actively promotes urban Ole and new franchise models to cope with complex retail environments.
Profit forecasting and valuation
Considering the pressure on the terminal retail environment, we lowered our 2024/25 profit forecast by 32%/33% to 0.23/0.32 billion yuan. The current stock price corresponds to 2024/25 18x/13xP/E. Considering that the company's main business is still resilient, it maintains an outperforming industry rating. Considering the correction in the industry's valuation center, we adjusted the target price from 13.10 yuan to 8.91 yuan, corresponding to 23x/16x P/E in 2024/25, corresponding to the 2024/25 deduction of non-net profit 19x/16x P/E, with 25% upside compared to the current stock price.
risks
Terminal demand has recovered less than expected, marketing investment has exceeded expectations, and there is a risk of loss of investment.
