ELLASSAY(SH:603808) GOLDEN SUN SECURITIES·2025-05-02 02:23Investment Rating - The report maintains a "Buy" rating for the company, with an adjusted profit forecast for 2025-2027 [5][8]. Core Views - The company is expected to face pressure on performance in 2024 due to overseas adjustments, but is anticipated to return to profitability in 2025 as it sheds burdens from its overseas business [5]. - The domestic core brand is leading the industry, with healthy growth in revenue, while overseas operations are expected to continue impacting overall performance negatively [3][5]. Financial Performance Summary - For 2024, the company is projected to have a revenue of 3.04 billion yuan, a year-on-year increase of 4%, but a net loss of 310 million yuan. Adjusted for one-time expenses, the net profit would be approximately 30 million yuan [1]. - In Q1 2025, the company reported a revenue of 690 million yuan, a decrease of 8% year-on-year, but a net profit of 40 million yuan, reflecting a 40% increase compared to the previous year [2]. - The gross margin for 2024 is expected to decline by 0.4 percentage points to 67.4%, with an overall net margin of -8.4% [1]. Market and Brand Analysis - The domestic market is showing robust growth, with a projected revenue increase of 10% in 2024 and 8.1% in Q1 2025 for the core brand [3]. - The company is focusing on enhancing its e-commerce channels, which have shown significant growth, with online sales increasing by 32.4% in 2024 [3]. - The main brands, including ELLASSAY and Laurel, are expected to continue their growth trajectory, with sales increases of 8% and 19% respectively in 2024 [4]. Cash Flow and Inventory Management - The company has effectively managed its cash flow, with a net operating cash flow of 420 million yuan at the end of 2024 [5]. - Inventory levels have decreased, with a year-on-year reduction of 12.3% by the end of 2024, indicating efficient inventory management [5].