Proya(SH:603605)2024-10-28 01:43Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 115, representing a potential upside of 19.9% from the current price of RMB 95.9 [3]. Core Insights - The company reported a revenue growth of 21.2% and a net profit growth of 20.7% in Q3 2024, which aligns with expectations despite being a traditionally weak sales season for cosmetics [1]. - The balanced growth across the main and sub-brands has contributed to the revenue increase, with both the main brand and the sub-brand 彩棠 achieving around 20% revenue growth, while the OR brand saw over 40% growth [1]. - The company has implemented various measures to improve profit margins, resulting in a sequential increase in gross margin by 1.1 percentage points to 70.7% in Q3 2024, despite a year-on-year decrease of 2 percentage points [1]. - The management is optimistic about the upcoming "Double 11" sales event, expecting strong performance due to the company's competitive pricing and enhanced online channel operations [1]. Financial Performance Summary - Revenue for 2022 was RMB 6,385 million, with a year-on-year growth of 37.8%. Projections for 2024E revenue are RMB 11,590 million, reflecting a growth rate of 30.2% [2]. - Net profit for 2022 was RMB 817 million, with a year-on-year growth of 41.9%. The forecast for 2024E net profit is RMB 1,558 million, indicating a growth of 30.5% [2]. - The company's PE ratio is projected to decrease from 46.8 in 2022 to 24.4 in 2024E, reflecting an improving valuation as earnings grow [2]. - The gross margin is expected to stabilize around 68.5% to 68.8% from 2024 to 2026, indicating a consistent profitability outlook [5]. Strategic Developments - The company has recently completed key personnel adjustments, including the appointment of a new CMO and chief scientist, which is expected to enhance strategic execution [1]. - Management is in the process of formulating a three-year strategic plan under the new CEO, focusing on expanding into overseas markets and developing a series of brand strategies [1].