SYG(SZ:300740) Jianghai Securities·2024-05-11 02:02Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [13]. Core Insights - The company has developed a multi-brand matrix with its own brands contributing over 60% to profits, with significant growth in revenue and net profit for its key brand, Yifidan [1][4]. - The company has seen a continuous improvement in gross margin, which increased by 5.32 percentage points to 58.44% in 2023, driven by a higher proportion of high-margin brands [1][36]. - The company has successfully implemented an equity incentive plan to motivate core employees, with performance targets set for net profit in 2023 and 2024 [1][32]. Summary by Sections Company Overview - The company operates a range of well-known brands including YuniFang, Dazhuidi, and Xiaomilu, and has established a digital international beauty platform [6][30]. - The company has formed strategic partnerships with over 50 international brands and has taken over the e-commerce business for several well-known brands in China [6]. Financial Performance - The company achieved a revenue of 285 million yuan for Yifidan in 2023, representing a year-on-year growth of 199.2%, with a net profit of 73 million yuan, up 205.3% [1]. - The company forecasts revenue growth for 2024-2026 at 10.01%, 9.24%, and 8.56% respectively, with net profit growth of 34.61%, 21.58%, and 14.51% [1][4]. Brand Development - The company has focused on high-end positioning, with an increasing share of revenue from high-margin brands while reducing reliance on low-margin products [1][4]. - The brand Dazhuidi has shown impressive growth, with a GMV of 157 million yuan on Douyin, up 107% year-on-year [1]. Research and Development - The company has made significant advancements in R&D, focusing on traditional Chinese ingredients and innovative technologies, successfully developing proprietary raw materials [1][25][48]. - The company has filed over 400 patents and has developed more than 8000 proprietary formulas, showcasing its commitment to innovation [49]. Market Position - The company has seen a shift in revenue sources, with domestic sales decreasing from 80.7% in 2020 to 67.6% in 2023, while overseas sales have increased to 32.4% [7][19]. - The company has established strong partnerships with major e-commerce platforms, enhancing its market presence [21].