Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 23.00 [6][7]. Core Views - The company reported strong revenue growth in Q3, with a total revenue of RMB 20.1 billion, representing a year-over-year increase of 34.5% and a quarter-over-quarter increase of 6.8%. However, the net profit for Q3 was RMB 1.1 billion, showing a year-over-year increase of 5.4% but a quarter-over-quarter increase of only 49.3% [1][2]. - The revenue growth is driven by new product launches and channel expansion, with new products expected to contribute over 10% of total revenue for the year [2]. - The company is expected to improve its profitability in the coming quarters due to declining shipping costs, effective cost-reduction measures, and increased sales during peak seasons [1][4]. Revenue and Profitability - For the first three quarters of the year, the company achieved a total revenue of RMB 57.3 billion, a year-over-year increase of 38.5%, while the net profit was RMB 2.8 billion, a year-over-year decrease of 3.1% [1]. - The gross profit margin improved in Q3, with a net profit margin of 5.3%, up 1.5 percentage points from Q2, primarily due to a slight recovery in gross margin [3]. - The company expects to see a gradual release of profit margins in the upcoming quarters as shipping costs decrease and sales during the peak season help to dilute logistics and marketing expenses [4]. Financial Forecast and Valuation - The company’s projected net profits for 2024, 2025, and 2026 are RMB 4.4 billion, RMB 5.9 billion, and RMB 7.4 billion, respectively [4]. - The estimated revenue for the years 2024 to 2026 is RMB 8.15 billion, RMB 10.21 billion, and RMB 12.61 billion, reflecting growth rates of 34.2%, 25.2%, and 23.6% respectively [5]. - The company is valued at a PE ratio of 16x for 2025, leading to a target price of RMB 23.00 [4][5].
致欧科技：Q3营收增长亮眼，静待后续盈利改善