By-health(300146) 华创证券·2024-04-26 03:02Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 20.5 yuan [1]. Core Views - The company experienced a significant decline in performance in Q1 2024, with total revenue of 2.65 billion yuan, down 14.9% year-on-year, and a net profit of 730 million yuan, down 29.4% year-on-year. This decline is attributed to a high base effect from the previous year and increased brand investment [1][2]. - The company is expected to gradually improve its sales performance throughout the year, particularly with the launch of upgraded products in Q2 2024. The long-term strategy focuses on brand differentiation and resource allocation across multiple brands and channels [1][2]. Summary by Sections Financial Performance - In Q1 2024, the company reported total revenue of 2.65 billion yuan, a decrease of 14.9% year-on-year, and a net profit of 730 million yuan, down 29.4% year-on-year. The gross profit margin decreased by 0.4 percentage points to 69.9% [1]. - The main brand,健力多, and Life-Space saw revenue declines of 17.7% and 29.5% respectively, while the overseas business (LSG) experienced a decline of 5.1% [1]. Cost and Expenses - The company increased its brand investment, with sales expenses rising from 765 million yuan to 826 million yuan, leading to a sales expense ratio increase of 6.6 percentage points to 31.2% [1]. - Management and R&D expense ratios also increased, reflecting a focus on maintaining competitive advantages despite short-term revenue pressures [1]. Future Outlook - The company anticipates a gradual recovery in sales as the year progresses, driven by new product launches and a focus on brand strategy. The investment in brand building is expected to yield long-term benefits despite short-term challenges [1][2]. - The EPS forecast for 2024-2026 has been adjusted to 1.03, 1.14, and 1.25 yuan respectively, with corresponding P/E ratios of 15, 14, and 12 [2].