BIEM(SZ:002832) HTSC·2025-04-30 02:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 23.92 [8][9]. Core Insights - The company achieved a revenue of RMB 4.0 billion in 2024, representing a year-on-year increase of 13.2%, while the net profit attributable to shareholders was RMB 780 million, a decrease of 14.3% year-on-year, which was below previous expectations due to a weak recovery in consumer demand and significant pressure on offline channel margins [1]. - In Q1 2025, the company reported revenue of RMB 1.29 billion, a year-on-year increase of 1.4%, and a net profit of RMB 330 million, down 8.5% year-on-year [1]. - The company plans to distribute a dividend of RMB 0.5 per share for 2024, resulting in a payout ratio of approximately 36.6% [1]. Revenue Growth and Channel Development - Revenue growth is driven by the collaboration across various product categories, with significant increases in upper garments (+13.1%), outerwear (+17.5%), and lower garments (+6.3%) [2]. - The e-commerce channel saw a remarkable growth of 35.0%, while direct sales and distribution channels also contributed positively with increases of 7.2% and 24.1%, respectively [2]. - The company has established a comprehensive offline presence in key commercial districts and outlet stores, which is expected to enhance customer experience and drive revenue growth through an integrated online and offline strategy [2]. Profitability and Expense Management - The company's gross margin decreased by 1.6 percentage points to 77.0% in 2024, primarily due to a higher proportion of lower-margin outerwear sales [3]. - The selling expense ratio increased by 3.2 percentage points to 40.3%, attributed to higher advertising and e-commerce service costs, while the management expense ratio rose by 1.4 percentage points to 9.3% due to increased salaries [3]. - The report anticipates a gradual improvement in profitability for 2025, despite the current high expense ratios [3]. Operational Efficiency and Financial Health - The inventory turnover days improved by 22 days to 324 days, which is above the industry average but aligns with the operational model of high-end apparel brands [4]. - The company reported a net operating cash flow of RMB 750 million at the end of 2024, indicating a strong liquidity position [4]. Profit Forecast and Valuation - The net profit estimates for 2025 and 2026 have been adjusted downwards by 14% and 11% to RMB 900 million and RMB 1.07 billion, respectively, with a new forecast for 2027 at RMB 1.16 billion [5]. - The report assigns a price-to-earnings (PE) ratio of 15x for 2025, reflecting the company's superior performance compared to peers and the potential of its overseas brand [5].