KAIYUAN SECURITIES·2024-04-25 08:32Investment Rating - The investment rating for the company is "Buy" (maintained) [2][6] Core Views - The company's Q1 2024 revenue met expectations, with improvements in retail discounts and low-end sales [6] - The company is expected to see a net profit of 3.34 billion, 3.84 billion, and 4.35 billion for the years 2024, 2025, and 2026 respectively, with corresponding EPS of 1.3, 1.5, and 1.7 [6] - The current stock price corresponds to a PE ratio of 14.0, 12.1, and 10.7 for the years 2024, 2025, and 2026 respectively [6] Revenue and Profitability - The company's revenue for 2022 was 25.803 billion, increasing to 27.598 billion in 2023, and projected to reach 29.297 billion in 2024 [7] - The net profit for 2022 was 4.064 billion, which decreased to 3.187 billion in 2023, with a forecasted increase to 3.339 billion in 2024 [7] - The gross margin is expected to improve slightly from 48.4% in 2023 to 49.0% by 2026 [7] Sales Channels and Performance - Online sales saw a growth of 20-30% in Q1 2024, driven by platforms like Douyin and Dewu, while offline sales experienced a decline in low-end sales [6] - The company closed 26 stores in Q1 2024, maintaining a net opening expectation for the year [6] Inventory and Discounts - The company reported improvements in discount levels, with an overall discount of 60% in offline channels, down from 60% in the previous year [6] - The inventory turnover ratio remains healthy, with a ratio of 4-4.5 across all channels in Q1 2024 [6]