Core Viewpoint - In 2024, Liren Lizhuang reported disappointing financial results, with revenue plummeting by 37.44% year-on-year to 1.728 billion yuan, and a net loss of 24.4 million yuan, marking a 182.64% decline compared to the previous year. This represents the fourth consecutive year of revenue decline since its IPO in 2020, with a cumulative reduction of 62.43% [1][2]. Group 1: Financial Performance - Revenue has decreased for four consecutive years, with a significant drop of 37.44% to 1.728 billion yuan in 2024 [1]. - The net profit turned into a loss of 24.4 million yuan, reflecting a year-on-year decline of 182.64% [1]. - Despite a slight increase in gross margin to 35.89%, the net margin fell to -1.52%, indicating ineffective cost control [2]. Group 2: Business Model Challenges - The company's reliance on e-commerce agency operations faced dual challenges: the retreat of Korean beauty brands and the shift of some Western brands to self-operated models [2]. - The company’s dependency on a few major suppliers has led to a high risk of revenue loss due to brand withdrawals, with significant reliance on top five suppliers [3]. - Self-owned brands have not gained substantial market traction, with claims of growth overshadowed by a lack of technological barriers and competition from established brands [3]. Group 3: Strategic Issues - The company is experiencing a crisis due to its "brand parasite" business model, which has been exposed by industry changes [3]. - There is a strategic inconsistency, as the company is reducing inventory to maintain cash flow while simultaneously investing in low-yield financial products, raising concerns about its focus [3]. - Management instability, including the departure of key board members, has led to doubts about strategic continuity [4]. Group 4: Future Outlook - The company’s proposed strategies of reducing inventory, expanding self-owned brands, and betting on new platforms like Douyin may provide short-term relief but lack long-term competitive strength [5]. - The beauty industry is shifting towards a dual focus on "hardcore R&D and brand power," while the company's R&D investment is minimal compared to industry leaders [5]. - Without significant breakthroughs in self-owned brands or strategic acquisitions within the next 12 months, the company risks falling out of the mainstream beauty market [5].