SYG(SZ:300740) Guotai Junan Securities·2024-11-02 09:42Investment Rating - The investment rating for the company is "Accumulate" [2] Core Views - The company's performance in Q3 2024 was below expectations, primarily due to a one-time adjustment of traditional proprietary brands during its strategic transformation period. There is an expectation for operational improvement as the company focuses on international high-end beauty brands [3] Financial Summary - For the first three quarters of 2024, the company's revenue, net profit attributable to the parent, and net profit excluding non-recurring items were CNY 304.5 million, CNY 9.4 million, and CNY 10.8 million, respectively, showing a year-on-year decline of 10%, 48%, and 45% [9] - In Q3 2024, the company's revenue, net profit attributable to the parent, and net profit excluding non-recurring items were CNY 75.2 million, CNY -1.1 million, and CNY -1.2 million, respectively, reflecting a year-on-year decline of 31%, 130%, and 125% [9] - The gross profit margin for Q1-Q3 2024 increased by 5.08 percentage points to 63.09%, mainly driven by the continued growth of high-margin brands [9] - The company has adjusted its EPS forecasts for 2024-2026 to CNY 0.52, CNY 0.78, and CNY 1.02, respectively, and has raised the target price to CNY 16.38 [9] Strategic Developments - The company is undergoing a high-end transformation, focusing resources on building high-end brands and strategically reducing non-profitable brands and channels. The main brand, Yuni, has started to shrink its offline channels since Q2 [9] - The recent acquisition of the high-end skincare brand Revive aims to fill the gap in the U.S. market and is part of the company's strategy to establish itself as a new high-end beauty enterprise [9] - The core brand, Ifidan, continues to achieve double-digit growth, and the newly incubated mid-to-high-end brand PA is expected to see significant growth in 2024 [9]