SYG(SZ:300740) EBSCN·2024-08-01 04:03Investment Rating - The report maintains a rating of "Accumulate" for the company [1] Core Views - The company experienced a 0.1% year-on-year increase in revenue for the first half of 2024, while net profit attributable to shareholders decreased by 25.7% [1] - Increased investment in brand asset construction has led to higher marketing expenses, resulting in a significant rise in the sales expense ratio, which exceeded the gross profit margin [1][2] - The company is expected to leverage its multi-brand strategy to enhance sales and drive high-quality growth despite uncertainties in consumer demand [2] Financial Performance Summary - For the first half of 2024, the company achieved operating revenue of 2.29 billion yuan, with a net profit of 110 million yuan [1] - The gross profit margin improved by 4.6 percentage points to 61.5%, driven by the sales of high-margin products [1] - The company’s operating cash flow turned negative, primarily due to increased promotional expenses [1][4] Revenue Breakdown - Online revenue grew by 2% while offline revenue declined by 12% in the first half of 2024 [1] - The Douyin platform saw a 73% increase in revenue, accounting for 37% of total revenue [1] - The revenue distribution among different sales models for the first half of 2024 was 73% self-operated, 16% distribution, 5% consignment, and 6% others [1] Profitability Forecast - The report projects a decrease in net profit forecasts for 2024 to 2026, with net profit attributable to shareholders adjusted down by 28%, 37%, and 38% respectively [2] - The expected EPS for 2024, 2025, and 2026 are 0.71 yuan, 0.80 yuan, and 0.90 yuan respectively, with corresponding P/E ratios of 17 and 15 for 2024 and 2025 [2][3]