HEILAN HOME(600398) 国盛证券·2025-01-02 00:22Investment Rating - The investment rating for the company is upgraded to "Buy" from "Accumulate" [7][30]. Core Views - The main brand, HLA, is a leading men's apparel brand that has maintained steady development and has established strong channel management capabilities, laying the foundation for expanding retail businesses like JD Outlet [3]. - The company is expected to recover healthy growth in 2025 after facing short-term pressure in 2024, with a focus on brand management and new business developments [13][30]. - The JD Outlet business is progressing well, with plans to increase the number of stores significantly, which could enhance profitability and market presence [4][24]. Company Overview - HLA brand revenue for Q1 to Q3 2024 decreased by 5% year-on-year to 11.3 billion yuan, while gross margin increased by 0.9 percentage points to 45.3% [3]. - As of Q3 2024, the number of HLA stores reached 5,872, with 1,379 direct-operated stores and 4,493 franchise stores, indicating a leading position in the industry [3]. - The company has a strong focus on enhancing product quality and introducing innovative product lines, which have been well-received in the market [3]. Business Segments - The offline JD Outlet business opened its first store in September 2024, with expectations to expand to around 10 stores by the Chinese New Year in 2025 [4]. - The online JD Outlet business is still in the adjustment phase, with expectations for integration with offline operations by the first half of 2025 [25]. - The company’s other brand revenues increased by 20% year-on-year to 1.76 billion yuan in Q1 to Q3 2024, driven by the consolidation of the Sboz brand [29]. Financial Performance - The company's revenue for 2024 is projected to be 21.33 billion yuan, with a slight decline of 0.9% year-on-year, while net profit is expected to drop by 25.3% to 2.21 billion yuan [15][30]. - The company has maintained a high dividend payout ratio of over 85% from 2021 to 2023, making it attractive to investors [30]. - The financial outlook for 2025 includes a projected net profit of 2.70 billion yuan, reflecting a recovery in profitability [30].