LFX(600612) KAIYUAN SECURITIES·2025-05-12 07:20Investment Rating - The investment rating for the company is "Buy" (maintained) [1][4][13] Core Views - The company experienced a significant decline in revenue in 2024, with a total revenue of 567.93 billion yuan, down 20.5% year-on-year, and a net profit of 19.50 billion yuan, down 11.9% year-on-year. The first quarter of 2025 showed further revenue decline of 31.6% to 175.21 billion yuan and a net profit decrease of 23.6% to 6.13 billion yuan [4][5] - Due to fluctuations in gold prices, the profit forecasts for 2025-2026 have been revised downwards, with expected net profits of 17.63 billion yuan for 2025 and 19.11 billion yuan for 2026, compared to previous estimates of 21.80 billion yuan and 23.88 billion yuan respectively. The EPS is projected to be 3.37 yuan for 2025 and 3.65 yuan for 2026 [4][5] - The company maintains a strong brand presence and aims to restore growth momentum through product and channel optimization, with a reasonable valuation [4][6] Financial Summary - In 2024, the jewelry business generated revenue of 469.08 billion yuan, a decline of 19.3% year-on-year, primarily due to high gold prices affecting sales. The gross margin for 2024 and Q1 2025 was 8.9% and 9.1% respectively, showing slight improvements [5][8] - The company’s revenue is projected to recover slightly in 2026 and 2027, with expected revenues of 56.48 billion yuan and 60.41 billion yuan respectively, indicating a growth rate of 7.5% and 7.0% [8][10] - The financial ratios indicate a stable gross margin of around 8.9% and a net margin of 4.5% for the forecasted years [8][10] Strategic Initiatives - The company is focusing on brand renewal, enhancing product offerings, and optimizing distribution channels to regain growth momentum. This includes deepening market penetration in key regions and expanding into new markets [6][9] - The product strategy involves developing trendy and youthful designs, as well as collaborations with popular IPs to attract younger consumers [6][9]