Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of more than 15% compared to the benchmark index [4]. Core Insights - The company reported a stable growth in net profit attributable to the parent company, with a 1.38% year-on-year increase, while the net profit excluding non-recurring items grew by 11.3% [1][2]. - The medical beauty segment showed a revenue increase of 3.47% year-on-year, contributing significantly to the overall performance, while the women's clothing and children's segments faced slight pressure [2][3]. - The company is actively expanding its medical beauty business through acquisitions and investments, with a total of 9.5 billion yuan planned for capital increase in its medical management subsidiary [3]. Financial Performance Summary - In 2024, the company achieved a revenue of 56.91 billion yuan, with a gross margin of 58.85%, up by 1.41 percentage points year-on-year [1]. - The net profit for 2024 was reported at 2.57 billion yuan, with a net profit margin of 5.19%, reflecting a year-on-year increase of 0.29 percentage points [1]. - The company’s operating expenses showed a decrease in sales expense ratio to 40.43%, while management expenses increased slightly to 8.93% [1]. Segment Performance Summary - The medical beauty segment generated 27.84 billion yuan in revenue, with a gross margin of 54.42% [2]. - The women's clothing segment reported a revenue of 19.25 billion yuan, down by 2.97% year-on-year, while the children's segment saw a decline of 5.53% with revenues of 9.21 billion yuan [2]. Future Earnings Forecast - The company forecasts earnings per share (EPS) of 0.62 yuan, 0.66 yuan, and 0.69 yuan for the years 2025, 2026, and 2027 respectively, with corresponding price-to-earnings ratios of 26x, 24x, and 23x [4].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% compared to the benchmark index [4]. Core Insights - The company reported a stable growth in net profit excluding non-recurring items, with a 1.38% year-on-year increase in adjusted net profit to CNY 2.57 billion and an 11.3% increase in net profit excluding non-recurring items to CNY 2.18 billion for 2024 [1][2]. - The revenue for 2024 was CNY 56.91 billion, showing a slight year-on-year decline, while the gross margin improved to 58.85%, up 1.41 percentage points [1]. - The company is actively expanding its medical beauty segment, with a 3.47% year-on-year revenue growth in this area, contributing CNY 27.84 billion in revenue [2]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of CNY 56.91 billion, with a net profit of CNY 2.57 billion, and a net profit margin of 5.19%, reflecting a 0.29 percentage point increase year-on-year [1]. - The medical beauty segment generated CNY 27.84 billion in revenue, with a gross margin of 54.42% [2]. - The women's clothing segment saw a revenue decline of 2.97% to CNY 19.25 billion, while the infant and toddler segment decreased by 5.53% to CNY 9.21 billion [2]. Strategic Developments - The company has been actively pursuing external growth through acquisitions, with a total investment of CNY 9.5 billion planned for its medical management subsidiary [3]. - By the end of 2024, the company had established seven medical beauty acquisition funds with a total scale of CNY 28.37 billion, aiming to enhance its medical beauty business [3]. Earnings Forecast - The company projects earnings per share (EPS) of CNY 0.62, CNY 0.66, and CNY 0.69 for the years 2025, 2026, and 2027 respectively, with corresponding price-to-earnings ratios (P/E) of 26, 24, and 23 [4].

Core Viewpoint - In 2024, the company achieved operating revenue of 5.691 billion yuan, a slight decrease of 0.24% after retrospective adjustments, while the net profit attributable to the parent company was 257 million yuan, an increase of 1.38% [2] Financial Performance - The company reported a net cash flow from operating activities of 567 million yuan, with cash on hand increasing to 556 million yuan, and a dividend payout ratio exceeding 60%, indicating a healthy overall cash flow level [1] - The medical beauty segment generated operating revenue of 2.784 billion yuan, up 3.47%, with the segment's contribution to total revenue rising to 48.9% [1][3] - The company plans to distribute profits of 177 million yuan, accounting for 68.81% of the net profit attributable to the parent company for 2024 [2] Medical Aesthetics Segment - The medical beauty segment's gross profit margin improved to 54.42%, an increase of 0.7 percentage points, with the proportion of non-surgical services rising from 82.96% in 2023 to 85.58% [3] - Major institutions such as Sichuan Milan Baiyu reported revenue of 579 million yuan, down 1.7%, while net profit increased by 2.0% to 617 million yuan, indicating effective profit margin improvement [3] - The operating profit margin for the medical beauty segment reached 6.87%, a significant increase of 3.5 percentage points compared to 2023 [3] Apparel and Children's Products - The women's clothing segment achieved operating revenue of 1.925 billion yuan, a decrease of 2.97%, with an operating profit margin of 6.79% [4] - The online sales proportion for women's clothing increased to 39.94%, up 2.7 percentage points, with significant growth in various e-commerce channels [4] - The children's products segment reported operating revenue of 921 million yuan, down 5.53%, but remains a leader in the Korean market [4] Future Outlook - The company expects net profits attributable to the parent company to reach 305 million yuan, 370 million yuan, and 448 million yuan in 2025, 2026, and 2027, respectively, with corresponding price-to-earnings ratios of 23, 19, and 16 times [5] - The recovery of demand in the medical aesthetics industry, along with the gradual improvement in profitability from new and recently acquired institutions, is anticipated to drive profit growth in the segment [5] - The company is actively expanding new channels and enhancing operational capabilities in the apparel segment while consolidating its core brand [5]

Core Viewpoint - The performance of Langzi Co., Ltd. is highly unbalanced, with the medical beauty business thriving while the women's clothing and infant clothing sectors are declining, reflecting significant changes in the Chinese consumer market [1][8] Medical Beauty Business - The medical beauty segment is the biggest highlight for Langzi in 2024, generating revenue of 2.784 billion yuan, a year-on-year increase of 3.47%, accounting for 48.92% of total revenue [1] - The gross profit margin for the medical beauty business is 54.42%, up by 0.65% year-on-year, indicating strong profitability [1] - Langzi has expanded its influence in the medical beauty market through acquisitions of institutions like Zhengzhou Jimei and Beijing Milan Baiyu, now operating 41 medical beauty institutions across key cities [1][7] - Despite the growth, there are signs of differentiation among brands under Langzi's medical beauty umbrella, with some regional institutions like Wuhan Wuzhou and Hunan Yamei experiencing revenue declines of approximately 3.03% and 2.81% respectively [2][3] Traditional Business Performance - The women's clothing segment generated revenue of 1.925 billion yuan in 2024, a decline of 2.97%, but maintained the highest gross profit margin of 63.45% among all segments [4] - The infant clothing segment faced significant challenges, with revenue of 921 million yuan, down 5.53%, despite a high gross profit margin of 61.76% [4][5] - The infant clothing market is expected to face systemic contraction due to declining birth rates, with a projected annual growth rate of less than 3% over the next five years [5] Strategic Direction - Langzi is at a strategic crossroads, considering whether to fully commit to the medical beauty sector or to use its success in medical beauty to support traditional businesses [6][8] - Recent actions indicate a focus on core business and strategic transformation, including the sale of a loss-making infant brand and significant capital increases for its medical beauty subsidiary [6][7] - The company is also engaging in joint investments with management and core employees to accelerate the national layout of its medical beauty business [7] Industry Context - The medical beauty market in China is projected to grow at a rate of 10% in 2024, with a compound annual growth rate of 10%-15% over the next three years, indicating substantial growth potential [2] - The medical beauty market's penetration rate in China is only 4-5%, suggesting significant room for development compared to more mature markets like the US and South Korea [2]

Investment Rating - The investment rating for the company is "Outperform" (maintained) [1] Core Views - The company continues to consolidate its medical aesthetics institutions, with an increasing proportion of online sales in its clothing segment [1] - The 2024 revenue is projected at 5.691 billion yuan, showing a slight decline of 0.2% year-on-year, while the net profit attributable to the parent company is expected to be 257 million yuan, a growth of 1.4% year-on-year [6] - The medical aesthetics segment is a key driver of performance, with revenue from this sector reaching 2.78 billion yuan, accounting for 48.9% of total revenue [6] - The fashion apparel business faces challenges, with a revenue decline of 3.0% to 1.93 billion yuan, while online sales in this segment grew by 4.0% [6] Financial Data and Profit Forecast - Total revenue forecast for 2023 to 2027 is as follows: - 2023: 5.145 billion yuan - 2024: 5.691 billion yuan - 2025E: 5.963 billion yuan - 2026E: 6.404 billion yuan - 2027E: 7.057 billion yuan - Net profit attributable to the parent company is projected to grow from 225 million yuan in 2023 to 312 million yuan in 2027 [5][7] - The gross margin is expected to improve from 57.4% in 2023 to 58.8% in 2024, with a slight decline to 58.8% by 2027 [5][6]

Core Viewpoint - The company, Langzi Co., Ltd., disclosed an error in the key management personnel compensation figures in its 2024 semi-annual report, necessitating a correction in the financial report section [1][2]. Financial Report Correction - The initial reported compensation for key management personnel was 8,975,748.30 yuan for the current period, which was incorrect [1]. - The corrected compensation for key management personnel is now reported as 3,783,665.70 yuan for the current period, compared to 3,556,591.61 yuan for the previous period [2].

Meeting Overview - The 13th meeting of the 5th Supervisory Board of the company was held on March 28, 2025, with all three supervisors present, and the meeting was conducted in accordance with relevant laws and regulations [1][2]. Financial Reports - The Supervisory Board confirmed that the 2024 Annual Report and its summary comply with legal and regulatory requirements, and the content is accurate and complete [2][3]. - The company achieved a net profit attributable to the parent company of approximately 257.20 million yuan, with the parent company achieving a net profit of approximately 194.49 million yuan for 2024 [3]. Profit Distribution Plan - The proposed profit distribution plan includes a cash dividend of 4 yuan per 10 shares, totaling approximately 176.98 million yuan, with remaining undistributed profits of approximately 279.94 million yuan to be carried forward [3][4]. Internal Control and Audit - The internal control self-assessment report for 2024 was deemed to accurately reflect the company's internal control system's construction and operation [2][3]. - The company plans to continue employing Lixin Accounting Firm as the auditor for the 2025 fiscal year [5]. Other Proposals - The company proposed to set a guarantee limit for external guarantees based on business development needs, which is considered a normal operational activity [5][6]. - The company also plans to apply for a comprehensive credit limit from financial institutions and use idle funds for wealth management products in 2025 [6]. Voting Results - All proposals received unanimous approval from the Supervisory Board, with 3 votes in favor and no votes against or abstentions [1][2][3][4][5][6].

Meeting Announcement - The company will hold the 2024 Annual General Meeting on April 25, 2025, at 14:00 [1] - The meeting will include a presentation by independent directors [1] Attendance Eligibility - Ordinary shareholders or their agents holding shares on the registration date are eligible to attend the meeting [2] - Company directors, supervisors, senior management, and appointed lawyers are also allowed to attend [2] Agenda Items - The meeting will review several proposals, including the annual remuneration plan [4] - Specific proposals affecting minority investors will require separate voting and disclosure [4] - A special resolution regarding the external guarantee limit for 2025 will need a two-thirds majority to pass [4] Registration and Voting Procedures - Shareholders must register for the meeting with appropriate identification and documentation [5] - Network voting will be available through the Shenzhen Stock Exchange systems [6] - Detailed voting procedures are provided for both non-cumulative and cumulative voting proposals [6]

Core Points - The report provides an audit of Langzi Co., Ltd.'s financial statements for the year 2024, including a summary of non-operating fund occupation and other related transactions [1] - The management of Langzi Co. is responsible for the accuracy and completeness of the summary table related to non-operating fund occupation [1] - The audit did not find any significant inconsistencies between the summary table and the audited financial statements [1] Summary of Non-Operating Fund Occupation - The total non-operating fund occupation at the end of 2024 was 59,722,295.08, with an initial occupation of 44,564,381.57 and a cumulative occupation during the year of 13,850,000.00 [2] - The report details various related parties involved in non-operating fund occupation, including Chengdu Ziyan Medical Supply Chain Management Co., Ltd. and others [2] - The report emphasizes that the summary table should be read in conjunction with the audited financial statements for a better understanding of the non-operating fund occupation situation [1]

Core Viewpoint - The independent director's report highlights the company's adherence to regulations and commitment to protecting the interests of all shareholders, particularly minority shareholders, through diligent oversight and participation in key committees [1][8]. Attendance and Voting - The independent director attended all 5 board meetings and 5 shareholder meetings in 2024, voting in favor of all proposals and engaging with minority shareholders [1][2]. Committee Participation - The independent director participated in the Compensation and Assessment Committee once, the Nomination Committee once, and the Audit Committee eight times, including three communications with the accounting firm regarding the audit plan [2][3]. Independent Director Meetings - Several independent director meetings were held to review significant matters, including cash acquisitions and annual profit distribution proposals, all of which were approved without harming the interests of the company or shareholders [4][6][10]. On-Site Inspections - The independent director conducted on-site inspections to understand the company's strategic planning, operational status, and financial conditions, maintaining communication with other board members and management [4][7]. Investor Rights Protection - The independent director reviewed all proposals carefully and exercised voting rights independently and objectively, promoting scientific decision-making within the board [7][8]. Key Focus Areas - The independent director focused on related party transactions, ensuring that all reviewed proposals did not harm the interests of the company or minority shareholders [8][9]. - The company timely prepared and disclosed its annual and quarterly reports, accurately reflecting financial data and operational strategies [9]. - The board approved the reappointment of the accounting firm for the 2024 audit, ensuring compliance with relevant regulations [9][10]. - The board also approved the remuneration plans for directors and senior management, ensuring no detriment to the company or minority shareholders [10].