Bestore(SH:603719) HTSC·2025-04-29 07:56Investment Rating - The investment rating for the company is "Accumulate" with a target price of 14.04 RMB [7][8]. Core Views - The company experienced a revenue decline of 11.0% year-on-year in 2024, with total revenue reaching 7.16 billion RMB. The net profit attributable to the parent company was -0.5 million RMB, a significant drop from 1.8 million RMB in 2023. The fourth quarter of 2024 saw a revenue of 1.68 billion RMB, down 18.0% year-on-year, and a net loss of 0.7 million RMB [1][4]. - The company's high-end product positioning is facing pressure from the trend towards cost-effective consumption, leading to a net reduction of 589 stores in 2024. The first quarter of 2025 also saw a decline in revenue of 29.3% year-on-year, indicating ongoing operational challenges [1][2]. - The company is expected to take time to adjust its operations effectively due to a weak recovery in the consumer environment and ongoing competition from bulk retail formats [4]. Summary by Sections Financial Performance - In 2024, the company's gross margin decreased by 1.6 percentage points to 26.1%, primarily due to price reductions impacting profitability. The sales expense ratio increased by 1.5 percentage points to 21.1% as scale effects weakened [3]. - The first quarter of 2025 saw a gross margin of 24.6%, with a net profit margin of -2.1%, reflecting the challenges posed by low pricing strategies and reduced scale effects [3]. Revenue and Store Count - Revenue by product category in 2024 showed declines across most segments, with dried fruits down 6.1%, nuts down 14.0%, and meat snacks down 23.6%. The company also faced a significant reduction in store count, with a net decrease of 123 stores in the first quarter of 2025 [2]. - The e-commerce channel experienced a decline of 30.0% year-on-year in the first quarter of 2025, indicating a shift in consumer purchasing behavior and increased competition [2]. Earnings Forecast - The earnings per share (EPS) forecast for 2025 has been adjusted down to 0.02 RMB, with expectations of a gradual recovery in 2026 to 0.26 RMB and 0.42 RMB in 2027. The target price reflects a price-to-earnings (PE) ratio of 54x for 2026 [4][6].