SCSF(SH:600779) Huachuang Securities·2025-05-05 13:41Investment Rating - The report maintains a "Strong Buy" rating for the company, indicating an expectation to outperform the benchmark index by over 20% in the next six months [1][21]. Core Views - The company reported a total revenue of 5.22 billion yuan for 2024, a year-on-year increase of 5.3%, and a net profit attributable to shareholders of 1.34 billion yuan, up 5.7% year-on-year. The fourth quarter of 2024 saw revenues of 1.43 billion yuan, a 4.7% increase, while net profit decreased by 12.3% to 220 million yuan. In Q1 2025, revenue reached 960 million yuan, a 2.7% increase, with net profit at 190 million yuan, up 2.1% [1][3][7]. Financial Performance Summary - 2024 Financials: Total revenue was 5,217 million yuan with a year-on-year growth of 5.3%. Net profit was 1,341 million yuan, reflecting a 5.7% increase. The gross margin decreased by 0.4 percentage points to 82.8% due to a shift in product mix and slight increases in discounts [3][7]. - 2025 Projections: Expected revenue growth of 2.5% to 5,349 million yuan and net profit growth of 1.8% to 1,365 million yuan. The EPS is projected to be 2.80 yuan [3][11]. - Quarterly Breakdown: Q1 2024 revenue was 785 million yuan, with a gross margin of 81.5%. The company experienced a slight increase in gross margin to 82.0% in Q1 2025, benefiting from an improved product mix [8][11]. Strategic Focus - The company is focusing on product upgrades and channel optimization, aiming for a dual-brand strategy with "Shuijingfang" and "Diyifang." New high-end products have been launched, and there is a strong emphasis on expanding market share in core markets [7][11]. - The company plans to enhance its distribution channels, targeting double-digit growth in new store openings in key cities and improving sales efficiency in benchmark stores [7][11]. Valuation Metrics - The target price is set at 64 yuan, with the current price at 45.55 yuan, indicating significant upside potential. The projected P/E ratio for 2025 is 16 times, decreasing to 13 times by 2027 [3][11].