Investment Rating - Buy (Maintained) [5] Core Views - The company's performance is stable with growth, driven by franchise expansion and investments [1] - Revenue and net profit show steady increases, with H1 2024 net profit up by 15% [1] - Franchise model focuses on lower-tier cities, with significant sales growth in newly opened stores [3] - Collaboration with Xinxuan to explore live streaming and new retail, potentially enhancing profit margins [4] Performance Overview - 24Q1-3 revenue increased by 7% YoY to 6.8 billion, with net profit attributable to shareholders up by 12% to 130 million [1] - 24Q3 revenue grew by 4% YoY to 2.28 billion, with net profit up by 9% to 50 million [1] - Non-recurring gains increased due to higher returns from financial products [1] Cost Efficiency and Profitability - Gross margin improved to 29.5% (+0.2pct), with net margin at 2.3% (+0.3pct) [2] - Management expense ratio decreased to 5.1% (-0.4pct), while R&D expense ratio dropped to 0.4% (-0.2pct) [2] Franchise Expansion - 5 franchise stores have been opened, focusing on lower-tier cities [3] - The first franchise store in Sichuan saw a 43% MoM sales increase in September and a 62% increase in October [3] Strategic Collaboration and New Ventures - The company plans to establish a joint venture, Lianqi Future, with a 45% voting right, to explore live streaming and new retail [4] - The joint venture is expected to enhance revenue stability and profit potential [4] Financial Forecasts - Revenue is projected to grow to 9.92 billion (+13%) in 2024, 11.03 billion (+11%) in 2025, and 11.93 billion (+8%) in 2026 [4] - Net profit attributable to shareholders is expected to reach 196 million (+86%) in 2024, 288 million (+47%) in 2025, and 396 million (+38%) in 2026 [4] - Current PE ratios are 71X for 2024, 48X for 2025, and 35X for 2026 [4] Financial Ratios and Metrics - Gross margin is forecasted to rise from 29.56% in 2023 to 31.43% in 2026 [6] - Net margin is expected to increase from 1.20% in 2023 to 3.32% in 2026 [6] - ROE is projected to grow from 3.35% in 2023 to 9.72% in 2026 [6]
孩子王：24年三季报点评报告：业绩稳中有增，加盟+投资打开成长空间