HEILAN HOME(600398) 光大证券·2024-10-31 02:52Investment Rating - Buy (Maintained) with a current price of 6.03 CNY [1] Core Views - Short-term performance under pressure, with expectations for retail recovery and multi-business growth [1] - 24Q3 revenue and net profit declined by 2% and 22% YoY respectively, with Q3 performance further weakening [1] - Revenue for the first three quarters of 2024 was 15.26 billion CNY, down 2.0% YoY, while net profit attributable to shareholders was 1.91 billion CNY, down 22.2% YoY [1] - Q3 revenue was 3.89 billion CNY, with net profit attributable to shareholders at 270 million CNY [1] - Revenue from the Hailan Home series and group purchasing declined, while other brands and online sales showed significant growth [1] - Online sales grew by 44.7% YoY in the first three quarters of 2024, with Q3 online sales increasing by 39.7% [1] - Gross margin remained stable at 44.6%, but expense ratio increased by 2.2 percentage points to 27.1% [1] - Inventory increased by 32.1% to 12.33 billion CNY as of September 2024, with inventory turnover days rising to 346 days [1] Business Performance Breakdown Revenue by Brand - Hailan Home series accounted for 74.1% of revenue, down 5.0% YoY [1] - Group purchasing and customization accounted for 9.6% of revenue, down 13.5% YoY [1] - Other brands accounted for 11.5% of revenue, up 19.6% YoY, driven by the consolidation of Sbozi since April 2024 [1] Revenue by Channel - Direct sales accounted for 21.8% of revenue, up 4.3% YoY [1] - Franchise stores accounted for 63.8% of revenue, down 4.3% YoY [1] - Online sales accounted for 21.0% of revenue, up 44.7% YoY [1] Store Count - Total store count reached 7,129 as of September 2024, a net increase of 252 stores (+3.7%) from the beginning of the year [1] - Hailan Home series stores decreased by 1.7% to 5,872, while other brand stores increased by 39.5% to 1,257, mainly due to Sbozi consolidation [1] Financial Metrics Profitability - Gross margin for the first three quarters of 2024 was 44.6%, down 0.2 percentage points YoY [1] - Hailan Home series gross margin was 45.33%, up 0.87 percentage points YoY [1] - Group purchasing and customization gross margin was 47.21%, down 0.84 percentage points YoY [1] - Other brands gross margin was 53.27%, down 1.25 percentage points YoY [1] Expense Ratio - Expense ratio increased by 2.2 percentage points to 27.1%, with sales expense ratio up 3.2 percentage points to 22.0% [1] Inventory and Cash Flow - Inventory increased by 32.1% to 12.33 billion CNY as of September 2024, with inventory turnover days rising to 346 days [1] - Operating cash flow for the first three quarters was 26.89 million CNY, down 98.9% YoY [1] Future Outlook - Short-term retail environment remains challenging, with expectations for recovery in Q4, traditionally a peak sales season [2] - Promotional policies are expected to boost consumer confidence, benefiting the company as a leading mass-market brand with extensive offline presence [2] - Online channels are growing rapidly, with potential in Sbozi and overseas businesses, expected to drive new growth [2] - EPS forecasts for 2024-2026 have been revised down to 0.48/0.59/0.67 CNY, with 2024/2025 PE ratios at 12/10x, maintaining a "Buy" rating [2] Financial Projections Revenue and Profit - Revenue for 2024E is projected at 21.218 billion CNY, down 1.4% YoY, with net profit attributable to shareholders at 2.329 billion CNY, down 21.1% YoY [3] - Revenue for 2025E is projected at 23.726 billion CNY, up 11.8% YoY, with net profit attributable to shareholders at 2.843 billion CNY, up 22.1% YoY [3] - Revenue for 2026E is projected at 25.578 billion CNY, up 7.8% YoY, with net profit attributable to shareholders at 3.224 billion CNY, up 13.4% YoY [3] Key Ratios - ROE (diluted) for 2024E is projected at 14.6%, with PE ratios at 12x for 2024E and 10x for 2025E [3] - Dividend yield for 2022-2023 was 7.1%/9.3%, with projected yields of 6.9%/8.4%/9.6% for 2024E-2026E [3]