Winner Medical(300888) Changjiang Securities·2025-05-15 09:14Investment Rating - The report maintains a "Buy" rating for the company [9]. Core Views - In the short term, the company is expected to see strong performance due to low consumption base, continuous product momentum, and favorable store expansion trends. Q2 performance is anticipated to be promising, driven by gross margin improvements [2][8]. - In the medium term, the company is positioned to leverage its leading brand and strong product capabilities, expecting a favorable investment cycle supported by high earnings elasticity and new consumption valuation [2][8]. Financial Performance Summary - For 2024, the company achieved revenue of 8.978 billion, net profit of 0.741 billion, and non-recurring net profit of 0.590 billion, representing year-on-year growth of 9.7%, 19.8%, and 43.4% respectively. Q4 alone saw revenue of 2.91 billion, net profit of 0.14 billion, and non-recurring net profit of 0.12 billion, with significant year-on-year increases of 34% and a turnaround from losses [4][5]. - In Q1 2025, the company reported revenue of 2.61 billion, net profit of 0.25 billion, and non-recurring net profit of 0.23 billion, reflecting year-on-year growth of 36.5%, 36.3%, and 62.5% respectively [4][5]. Revenue Breakdown - The company's revenue from consumer products is expected to grow by 17% year-on-year to 4.99 billion in 2024, driven by strong performance in key product categories such as wet and dry cotton towels (31% growth) and sanitary napkins (18% growth) [5]. - Medical segment revenue for 2024 is projected to increase by 1.1% to 3.91 billion, with a notable contribution from the acquisition of GRI. Excluding the acquisition, medical revenue is expected to decline by 6% due to high base effects from infection protection products [5]. Margin Analysis - The gross margin for consumer products in 2024 is expected to decrease by 1 percentage point to 56%, primarily due to fluctuations in cotton prices. However, Q1 is anticipated to see a recovery in gross margin driven by strong performance in sanitary napkins and improved discount strategies [6]. - The medical segment's gross margin is projected to decline by 4 percentage points to 36.5% in 2024, largely due to high base effects from infection protection products [6]. Profitability Outlook - The operating profit margin for consumer products is expected to increase by 0.7 percentage points to 12.1% in 2024, driven by internal cost reduction efforts. The medical segment's operating profit margin is projected to decrease by 1.1 percentage points to 7.7% due to goodwill impairment losses [7]. Future Projections - The company is expected to achieve net profits of 1.04 billion, 1.27 billion, and 1.47 billion for the years 2025 to 2027, with corresponding price-to-earnings ratios of 29, 24, and 20 times [2][8].