SYG(SZ:300740) ZHESHANG SECURITIES·2024-11-02 14:23Investment Rating - The investment rating for the company is "Buy" and it is maintained [5] Core Views - The company is undergoing strategic adjustments, focusing on high-end luxury brands, which has led to short-term pressure on performance [2] - In Q3 2024, the company's revenue decreased by 31% year-on-year, resulting in a quarterly loss of 11.44 million [2] - The company aims to optimize its business structure by concentrating resources on high-end brands, which is expected to drive sustainable growth in the long term [3] Financial Summary - For the first three quarters of 2024, the company reported revenue of 3.04 billion, a decrease of 10% year-on-year, and a net profit attributable to the parent company of 94 million, down 48% [2] - In Q3 alone, revenue was 750 million, down 31% year-on-year, with a net loss of 11.44 million compared to a profit of 37.61 million in the same period last year [2] - The gross margin improved by 8 percentage points to 68% in Q3, while the net margin was -1.5%, a decrease of 5 percentage points year-on-year [2] Brand Performance - The company has three high-end beauty brands and is focusing on expanding these brands globally [2] - The brand "Ifidan" has seen over 50% growth in online sales and is expanding its offline presence with six new stores in high-end department stores [3] - "PA" has achieved explosive growth since its marketing push in the second half of 2023, targeting the repair and anti-aging market [3] - The acquisition of the high-end skincare brand "RéVive" is expected to enhance the company's portfolio and market presence [3] Earnings Forecast and Valuation - Revenue projections for 2024-2026 are 4.18 billion, 4.62 billion, and 5.02 billion, with year-on-year changes of -7%, +11%, and +9% respectively [4] - Net profit forecasts for the same period are 200 million, 308 million, and 372 million, with year-on-year changes of -32%, +54%, and +21% respectively [4] - The current market valuation corresponds to a price-to-earnings ratio of 24, 15, and 13 for the years 2024, 2025, and 2026 respectively [4]