DAZZLE FASHION(SH:603587) Guotai Junan Securities·2024-08-28 09:14Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 14.02 CNY, based on an industry-average PE of 16 times for 2024 [4][5]. Core Insights - The demand for mid-to-high-end women's clothing continues to weaken, putting pressure on the company's short-term profitability. However, the company is expected to operate steadily in the second half of the year due to ongoing optimization of offline channels. A recent share buyback announcement reflects the company's confidence in its development [3][4]. Financial Performance Summary - For the first half of 2024, the company reported revenue of 1.13 billion CNY, a year-on-year decrease of 9.5%, and a net profit attributable to shareholders of 220 million CNY, down 27.5% year-on-year. The second quarter alone saw revenue of 590 million CNY, a decline of 7.1% year-on-year, with a net profit of 110 million CNY, down 21.0% year-on-year [4][5]. - The company's gross margin decreased by 0.4 percentage points year-on-year in the first half of 2024. Revenue by brand showed declines across DA, DM, DZ, and RA, with respective revenues of 570 million CNY, 70 million CNY, 470 million CNY, and 20 million CNY, reflecting year-on-year decreases of 13.5%, 7.6%, 4.7%, and 0.9% [4]. - Online, direct, and distribution channel revenues were 190 million CNY, 450 million CNY, and 480 million CNY, with year-on-year changes of -3.1%, -19.0%, and -1.0% respectively. The company continues to close stores, with a net reduction of 5 direct stores and 55 franchise stores in the first half of 2024 [4][5]. Future Outlook - The company announced a share buyback plan of 100 to 200 million CNY, intended for employee stock ownership or equity incentives, indicating confidence in future performance. The company is expected to maintain a high dividend payout ratio in 2024, similar to previous years [4][5].