Breo(SH:688793) Shenwan Hongyuan Securities·2025-10-29 06:46Investment Rating - The report maintains an "Outperform" investment rating for the company [2][7]. Core Insights - The company's performance in Q3 2025 was below expectations, with total revenue of 552 million yuan, a year-on-year decline of 34%. The net profit attributable to the parent company was -66 million yuan, a significant drop of 601% year-on-year [7]. - The company is diversifying its sales channels, with the "Light Relaxation Moment" brand contributing to incremental growth. It is actively expanding in overseas markets and collaborating with major e-commerce platforms like Tmall and JD [7]. - The company has increased its offline presence, with 125 direct stores globally as of H1 2025, focusing on high-traffic areas. The "Light Relaxation Moment" brand aims to enhance service quality through a combination of smart devices and traditional therapies [7]. - The company has adjusted its profit forecasts downward due to rising expense ratios and lower-than-expected sales performance, projecting net profits of -27 million, 28 million, and 46 million yuan for 2025-2027 [7]. Financial Data and Profit Forecast - Total revenue for Q1-3 2025 was 552 million yuan, with a year-on-year decrease of 34.1%. The gross profit margin was 60.86%, down 5.94 percentage points year-on-year [6][7]. - The company recorded a net profit margin of -17.80% in Q3 2025, a decline of 12.21 percentage points year-on-year [7]. - The projected earnings per share for 2025 is -0.31 yuan, with a recovery expected in subsequent years [6][7].