Breo(SH:688793) Guotai Junan Securities·2024-02-25 16:00Investment Rating - The report maintains a "Cautious Accumulate" rating for the company with a target price of 30.70 CNY, unchanged from the previous forecast [2][20]. Core Insights - The company achieved impressive revenue growth in 2023, with a total revenue of 1.276 billion CNY, representing a year-on-year increase of 42.4%. However, the net profit showed a reduction in losses, amounting to -48 million CNY, which is a decrease in loss of 62% compared to the previous year [20][13]. - The company has implemented cost reduction and efficiency improvement measures that positively impacted overall gross margins. The successful launch of a flagship product through the Douyin channel contributed significantly to revenue growth [20][14]. - The company plans to introduce multiple new products in 2024, with expectations for product iteration and expansion into new categories, which is anticipated to drive further growth [20][14]. Summary by Sections Financial Performance - In 2023, the company reported a revenue of 1.276 billion CNY, up 42.4% year-on-year. The net profit was -48 million CNY, showing a significant reduction in losses compared to -124 million CNY in 2022 [20][13]. - The company’s Q4 performance was under pressure, primarily due to significant discounting during promotional seasons and one-time losses from asset impairments [20][14]. Future Outlook - The company is expected to maintain a positive growth trajectory with projected revenues of 1.483 billion CNY in 2024 and 1.723 billion CNY in 2025, reflecting growth rates of 16.2% for both years [20][13]. - The introduction of new products and expansion of distribution channels are key strategies for future growth, particularly through enhanced offline channel penetration [20][14]. Valuation Metrics - The report indicates a projected EPS of -0.56 CNY for 2023, with expectations of recovery to 0.88 CNY in 2024 and 1.31 CNY in 2025 [20][13]. - The company’s current market capitalization is approximately 2.474 billion CNY, with a price-to-earnings ratio of 26.93 [20][25].