SAINT ANGELO(SZ:002154) EBSCN·2024-08-19 00:39Investment Rating - The report maintains a "Buy" rating for the company [1][2]. Core Views - The company faced challenges in the first half of 2024 due to weak terminal demand, adverse weather conditions, and high base effects, resulting in a slight revenue increase of 0.4% year-on-year, while net profit decreased by 15.6% [1][2]. - The company is focusing on enhancing its internal capabilities and expanding its multi-brand strategy to navigate the current market challenges [2]. Financial Performance - In the first half of 2024, the company achieved operating revenue of 2.48 billion yuan, with a net profit attributable to shareholders of 340 million yuan, and a basic EPS of 0.24 yuan [1]. - The gross profit margin improved by 1.5 percentage points to 67.0%, attributed to strict control over terminal discounts [1][2]. - The company plans to distribute a cash dividend of 0.07 yuan per share (before tax) [1]. Brand Performance - Revenue contributions from major brands in the first half of 2024 were as follows: Baoxini (31.2%), Haggis (34.7%), Lefeiye (6.1%), and others [1]. - The performance of individual brands varied, with Baoxini and Haggis experiencing revenue changes of -3.7% and +0.3% respectively [1]. Channel Analysis - Revenue distribution by channel for the first half of 2024 was: Direct sales (40.7%), Group purchases (21.8%), Online (15.4%), and Franchises (14.4%), with respective year-on-year changes of -3.3%, -1.7%, -2.3%, and +7.4% [1]. - The total number of stores as of June 2024 was reported as follows: Baoxini (807), Haggis (467), Lefeiye (80), and others, with a net decrease in Baoxini stores [1]. Profitability and Cost Management - The report indicates that the increase in expense ratios outpaced the growth in gross margins, leading to a decline in net profit margins, which fell by 2.6 percentage points to 13.9% [1]. - The company’s operating cash flow decreased by 59.0% year-on-year, primarily due to reduced government subsidies and increased operational costs [1][2]. Earnings Forecast - The earnings forecast for 2024 to 2026 has been adjusted downward, with net profit estimates reduced by 16%, 17%, and 17% respectively, leading to projected EPS of 0.46, 0.52, and 0.59 yuan [2].