LBX(SH:603883) Donghai Securities·2024-11-01 09:05Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the stock over the next six months [6]. Core Insights - The company's revenue showed resilience with a year-on-year increase of 1.19% in the first three quarters of 2024, reaching 16.23 billion yuan, while net profit decreased by 12.06% to 630 million yuan due to various factors impacting profitability [8]. - The company is focusing on expanding its market presence in 11 key provinces while enhancing its existing advantages in established markets, with a total of 15,591 stores as of Q3 2024, including 2,368 new stores added in the first three quarters [8][9]. - The implementation of the Torch Project aims to optimize product categories and improve gross margins, which have increased to 33.87% in the first three quarters of 2024, up by 1.37 percentage points year-on-year [9]. - The company plans to adjust its store expansion strategy for 2024, targeting the addition of 2,840 new stores, with a focus on optimizing existing locations and reducing rental costs [10]. Summary by Sections Financial Performance - In 2023, the company reported a main revenue of 22.44 billion yuan, with a projected growth rate of 15.25% for 2024, reaching approximately 25.86 billion yuan [6][12]. - The net profit attributable to shareholders is expected to grow from 1.10 billion yuan in 2024 to 1.64 billion yuan by 2026, reflecting a compound annual growth rate of 22.38% [6][12]. Market Strategy - The company is actively pursuing a strategy to enhance its market share through flexible adjustments in its operational strategies, including a focus on franchise and alliance partnerships, which have seen significant growth in sales [10]. - The company has established partnerships with 76 alliance firms, contributing to a retail scale of 5.4 billion yuan, indicating a robust collaborative approach to market expansion [10]. Valuation Metrics - The report projects earnings per share (EPS) to increase from 1.45 yuan in 2024 to 2.15 yuan in 2026, with corresponding price-to-earnings (PE) ratios decreasing from 11.07 to 7.46 over the same period [6][12].