ELLASSAY(603808) 光大证券·2024-10-30 11:11Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of 7.08 yuan [1]. Core Views - The company experienced a 4.2% year-on-year increase in revenue for the first three quarters of 2024, but a significant decline of 84.2% in net profit attributable to shareholders [1]. - The company is expected to increase adjustments in its overseas business due to ongoing pressure, particularly from the IRO brand, while domestic operations remain stable [1][2]. - The report anticipates a temporary performance pressure due to intensified overseas business adjustments, but there is still potential for recovery in the future [2]. Financial Performance Summary - For the first three quarters of 2024, the company achieved operating revenue of 2.15 billion yuan, with a net profit of 21.53 million yuan, reflecting a year-on-year decline of 84.2% [1]. - The company's earnings per share (EPS) for 2024 is projected at 0.06 yuan, with subsequent years showing a recovery to 0.14 yuan in 2025 and 0.53 yuan in 2026 [2][4]. - The gross profit margin for the first three quarters of 2024 improved by 1.3 percentage points to 68.2% [1]. Brand and Channel Performance - Revenue contributions from various brands for the first three quarters of 2024 were as follows: Self-portrait (38.1%), Laurel (13.1%), Ed Hardy (8.4%), IRO (21.6%), and EH (16.5%), with notable growth in Self-portrait and Laurel [1]. - The company’s direct sales and distribution channels accounted for 84.2% and 13.7% of revenue, respectively, with direct sales showing a year-on-year increase of 10.3% [1]. Store Expansion and Inventory Management - As of September 2024, the total number of stores was 658, with a net increase of 6 stores since the beginning of the year [1]. - Inventory as of September 2024 increased by 1.1% to 0.95 billion yuan, with inventory turnover days rising by 68 days to 375 days [1].