Peacebird(SH:603877) Changjiang Securities·2025-04-08 10:44Investment Rating - The report maintains a "Buy" rating for the company [8]. Core Views - In the short term, the company is expected to see a recovery in profit growth due to the nearing end of store closures, gradual retail improvement, and enhanced franchise gross margins. In the long term, structural adjustments within the company are anticipated to significantly improve operational quality and profit elasticity. The company is shifting from profit elasticity driven by high retail growth to a more sustainable and robust internal capability-driven profit elasticity. Projected net profits for 2025, 2026, and 2027 are estimated at 370 million, 500 million, and 590 million yuan respectively, with corresponding PE ratios of 20, 15, and 12 [2][5]. Financial Performance Summary - For 2024, the company achieved revenue of 6.8 billion yuan, a decline of 12.7% year-on-year. The net profit attributable to the parent company was 260 million yuan, down 38.7% year-on-year, while the net profit excluding non-recurring items was 120 million yuan, a decrease of 57.4% year-on-year. In Q4 alone, revenue was 2.26 billion yuan, with a net profit of 150 million yuan, reflecting a year-on-year decline of 12.0% and 29.1% respectively [5][12]. Brand and Channel Performance - Retail performance remains under pressure due to brand adjustments, with Q4 revenues for various brands showing declines: PB women's wear down 16.7%, men's wear down 10.6%, and children's wear down 7.5%. However, gross margins improved across all categories, with notable increases for men's wear (+5.4 percentage points) and children's wear (+3.7 percentage points). The franchise channel saw significant gross margin improvements despite a revenue decline of 20.8% in Q4 [12][18]. Operational Efficiency - The company experienced a negative operating leverage effect, leading to a decrease in net profit margin. Q4 gross margin improved by 6.3 percentage points, but the expense ratio increased by 3.6 percentage points, primarily due to higher sales and marketing expenditures. The inventory structure requires optimization, with total inventory at 1.74 billion yuan at the end of 2024, up 15% year-on-year [12][18].