LBX(SH:603883) Ping An Securities·2024-11-01 03:00Investment Rating - The report maintains a "Recommended" rating for the company [4] Core Views - The company's revenue growth is slowing due to weak consumer spending and other factors, leading to a decline in net profit margin, which was 4.58% for the first three quarters of 2024, down 0.74 percentage points year-on-year [3] - The company is focusing on improving operational efficiency, resulting in an improvement in gross margin to 33.87% for the first three quarters of 2024, up 1.36 percentage points year-on-year [3] - The company is actively expanding into lower-tier markets, with a total of 15,591 stores as of the end of the reporting period, and 2,368 new stores added in the first nine months of 2024, with 86% of new stores located in key provinces and cities [3] Financial Summary - The company’s revenue for 2023 is projected at 22,437 million yuan, with a year-on-year growth of 11.2%, and is expected to reach 31,076 million yuan by 2026, with a compound annual growth rate of 14.6% [5] - Net profit for 2023 is estimated at 929 million yuan, with a year-on-year growth of 18.4%, projected to increase to 1,249 million yuan by 2026 [5] - The gross margin is expected to improve from 32.5% in 2023 to 36.1% by 2026, while the net margin is projected to stabilize around 4.0% [5][9] - The company’s return on equity (ROE) is expected to rise from 13.9% in 2023 to 14.3% by 2026 [9] Operational Metrics - The company has a total of 15,591 stores, with a focus on expanding in advantageous provinces and key cities [3] - The company’s asset-liability ratio is 64.4%, indicating a moderate level of financial leverage [4]