Breo(SH:688793) Southwest Securities·2024-05-05 02:30Investment Rating - The report maintains a "Hold" rating for the company, indicating that the stock is expected to perform in line with the market over the next six months [16][35]. Core Insights - The company has shown significant improvement in profitability, achieving a turnaround to profitability in Q1 2024. The revenue from new products accounted for 58.9% of total revenue in 2023, contributing to a notable increase in net profit margin [35][38]. - The company is projected to have earnings per share (EPS) of 0.99 yuan, 1.44 yuan, and 1.85 yuan for the years 2024, 2025, and 2026, respectively [35][38]. Summary by Sections Financial Performance - In 2023, the company reported a revenue of 1.2748 billion yuan, a year-on-year increase of 42.3%. The net profit attributable to the parent company was -50.87 million yuan, showing a 59% year-on-year improvement [38]. - For Q1 2024, the company achieved a revenue of 290 million yuan, a 28.6% increase year-on-year, and a net profit of 20 million yuan, marking a 956.1% increase year-on-year, thus completing its turnaround to profitability [38]. Revenue Breakdown - The company’s product sales in 2023 included 602,000 units of eye massagers, 281,000 units of neck massagers, and 1,373,000 units of head and shoulder massagers, with respective revenues of 190 million yuan, 170 million yuan, and 480 million yuan [38]. - Revenue from online direct sales reached 590 million yuan, reflecting a year-on-year growth of 67.5%, while offline direct sales generated 260 million yuan, up 32% year-on-year [38]. Profitability Metrics - The gross margin for 2023 improved by 9.5 percentage points to 59.3%. The gross margins for various product lines ranged from 39.2% to 67.1% [38]. - The net profit margin for Q1 2024 was 5.3%, an increase of 6.1 percentage points compared to the previous year, indicating continued improvement in profitability [38]. Future Projections - The company expects to maintain a growth trajectory with projected revenues of 1.5633 billion yuan, 1.8369 billion yuan, and 2.1501 billion yuan for 2024, 2025, and 2026, respectively [17][38]. - The report highlights a focus on cost control and efficiency improvements, which are expected to support ongoing profitability enhancements [35][38].