ELLASSAY(SH:603808) EBSCN·2024-05-04 10:09Investment Rating - The report assigns a rating of "Accumulate" to the company, indicating a potential investment opportunity with expected returns above the market benchmark index of 5% to 15% over the next 6-12 months [1][19]. Core Insights - The company has shown a strong recovery in its performance for the first half of 2023, with a revenue increase of 21.73% year-on-year, and a remarkable net profit growth of 416.56% [15][19]. - The gross profit margin improved significantly, contributing to the faster growth of net profit compared to revenue, with a net profit margin increase of 2.77 percentage points to 3.62% [15][19]. - The company is expected to continue leveraging its multi-brand strategy and gradually reduce losses in its overseas business [6][19]. Financial Performance Summary - In 2023, the company achieved a total revenue of 2.915 billion yuan, with a net profit of 106 million yuan, and an EPS of 0.29 yuan, proposing a cash dividend of 0.24 yuan per share [15][28]. - The gross profit margin for 2023 was 67.79%, with significant contributions from various brands, including ELLASSAY and LAUREL, which saw revenue increases of 21% and 47% respectively [16][27]. - The company’s operating cash flow for 2023 was 480 million yuan, reflecting a year-on-year increase of 52.71% [18][28]. Brand and Channel Performance - The main brand ELLASSAY accounted for 37% of total revenue, with a year-on-year growth of 20.68%, while online sales grew by 12.04% [15][27]. - The company has expanded its store count to 652 by the end of 2023, with a net increase of 6.36% year-on-year, indicating a robust expansion strategy [15][27]. - The performance of the online channel has been strong, with significant growth in brands like ELLASSAY and LAUREL, which saw increases of 17% and 63% respectively [15][27]. Future Earnings Forecast - The earnings forecast for 2024 and 2025 has been adjusted downwards due to the impact of overseas business, with expected EPS of 0.67 yuan and 0.88 yuan respectively [19][28]. - The projected net profit for 2024 is 248 million yuan, reflecting a growth rate of 135.03% compared to 2023 [28].