DAZZLE FASHION(603587) 国信证券·2024-11-08 05:54Investment Rating - The investment rating for the company is "Outperform the Market" [1][3][11] Core Views - The company experienced a 19.1% year-on-year decline in revenue in the third quarter, totaling 480 million yuan, while net profit fell by 47.1% to 60 million yuan [1][11] - Despite the revenue decline, the gross margin slightly increased by 0.7 percentage points to 73.6%, attributed to stable discount rates [1][11] - The company is focusing on optimizing its channels by closing inefficient stores and enhancing operational efficiency [1][11] Financial Performance Summary - Revenue for 2022 was 2,400 million yuan, with a forecasted decline to 2,266 million yuan in 2024, representing a 14.5% decrease [12][14] - Net profit is expected to decrease from 494 million yuan in 2023 to 345 million yuan in 2024, a decline of 30.2% [12][14] - The company’s earnings per share (EPS) is projected to drop from 1.03 yuan in 2023 to 0.72 yuan in 2024 [12][14] Profitability Metrics - The EBIT margin is forecasted to decrease from 25.9% in 2023 to 19.8% in 2024 [12][14] - The return on equity (ROE) is expected to decline from 13.2% in 2023 to 9.0% in 2024 [12][14] - The net profit margin is projected to be 15.2% in 2024, down from 18.9% in 2023 [9][12] Valuation - The reasonable valuation range has been adjusted to 11.7-12.6 yuan, down from the previous range of 14.0-15.1 yuan [11][12] - The price-to-earnings (PE) ratio for 2025 is estimated to be between 14-15x [11][12] Operational Insights - The company is actively closing underperforming stores, with a net closure of 10 direct-operated and 31 franchised stores in the third quarter [1][11] - The company is enhancing its digital capabilities to improve consumer engagement and product development [1][11]