By-health(300146) Guolian Securities·2024-10-28 02:17Investment Rating - The report suggests a "Hold" rating for the company, indicating a neutral stance on its stock performance relative to the market index [9]. Core Insights - The company reported a revenue of 5.734 billion yuan for the first three quarters of 2024, a decrease of 26.33% year-on-year, and a net profit attributable to shareholders of 869 million yuan, down 54.31% year-on-year. In Q3 2024 alone, revenue was 1.120 billion yuan, reflecting a significant decline of 48.76% year-on-year, with a net profit turning negative at -22 million yuan [2][6]. - The operational challenges are attributed to brand performance, with major brands experiencing substantial revenue declines due to base effects, reduced offline channel traffic, product transitions, and inventory adjustments. The report anticipates improvements post-transition [6]. - The company is undergoing strategic adjustments, focusing on core products and channels, which may lead to better performance in 2025 as base effects ease [6]. Financial Summary - For 2024, the company is projected to generate revenues of 7.189 billion yuan, a year-on-year decline of 23.57%, with net profits expected to be 815 million yuan, down 53.30%. The earnings per share (EPS) is forecasted at 0.48 yuan [6][8]. - The gross margin for Q3 2024 decreased by 2.64 percentage points to 65.31%, influenced by product transitions and reduced scale effects. The sales and management expense ratios increased significantly, leading to a gross profit margin decline [6]. - The company’s total assets are projected to be 14.929 billion yuan in 2024, with a debt ratio of 15.67% [8]. Brand and Channel Performance - In Q3 2024, the main brand, Jianli Duo, Lifespace, and overseas LSG brands reported revenues of 559 million, 107 million, 61 million, and 173 million yuan respectively, with year-on-year declines of 54.44%, 62.59%, 41.90%, and 27.31% [6]. - Revenue from offline and online channels in Q3 2024 was 480 million and 633 million yuan respectively, indicating a strategic shift towards focusing on sustainable products and profitable channels [6]. Future Outlook - The company is expected to benefit from the aging population trend, despite the current operational pressures and strategic transition pains. Revenue forecasts for 2025 and 2026 are 7.760 billion and 8.269 billion yuan respectively, with net profits projected to recover to 1.110 billion and 1.340 billion yuan [6][8].