HEILAN HOME(SH:600398) GOLDEN SUN SECURITIES·2025-04-30 03:29Investment Rating - The report maintains a "Buy" rating for the company [8] Core Views - The company is expected to experience a revenue decline of 3% year-on-year in 2024, with a significant drop in net profit by 27% [1] - The company has a high dividend payout ratio of 91%, making its dividend attractive with an estimated yield of 5.2% based on the closing price on April 29, 2025 [1] - The main brand's revenue is projected to decrease by 7% in 2024, while new business lines such as JD Outlet and Sporz are expected to drive growth [3][5] Summary by Sections Financial Performance - In 2024, the company's revenue is projected to be CNY 20.96 billion, down 3% year-on-year, with a net profit of CNY 2.16 billion, down 27% [1] - For Q1 2025, the company reported revenue of CNY 6.19 billion, flat year-on-year, and a net profit of CNY 0.94 billion, up 5% [2] - The gross margin for 2024 is expected to remain stable at 44.5%, while the net margin is projected to decline to 10.4% [1] Brand Performance - The main brand's revenue is expected to decline by 7% to CNY 15.27 billion in 2024, but it maintains a gross margin of 46.5% [3] - The group purchase and customization series is projected to see a revenue decline of 3% to CNY 2.22 billion [3] - Other brands are expected to grow by 32% to CNY 2.67 billion, driven by the integration of Sporz and JD Outlet [3] Channel Performance - Offline store revenue is expected to decline by 10% to CNY 15.74 billion in 2024, while online sales are projected to grow by 36% to CNY 4.42 billion [4] - Direct sales are expected to increase by 5% to CNY 4.78 billion, outperforming franchise sales, which are projected to decline by 6% [4] Cash Flow and Inventory Management - Inventory levels are expected to increase by 28.4% year-on-year to CNY 11.99 billion by the end of 2024, with inventory turnover days increasing [5] - Operating cash flow is projected to be CNY 2.32 billion in 2024, approximately 1.1 times the net profit for the same period [5] Future Outlook - The company anticipates a potential revenue growth in the low single digits for 2024, with net profit expected to grow rapidly due to a low base effect [5] - The report suggests that the company will continue to focus on high-quality store openings and improving profitability in new projects [5]