Performance Summary - In 2024, the company's operating revenue, net profit attributable to the parent, and net profit after deducting non-recurring gains and losses were 2.203 billion, 286 million, and 278 million yuan respectively, showing year-on-year declines of 1.27%, 15.91%, and 16.48% [1] - In Q1 2025, the company's operating revenue, net profit attributable to the parent, and net profit after deducting non-recurring gains and losses were 796 million, 144 million, and 144 million yuan respectively, with year-on-year declines of 4.32%, 9.29%, and 9.76% [1] Dividend and Revenue Goals - The dividend payout ratio for 2024 is 54.40%, up from 53.24% in 2023 [2] - The revenue target for 2025 is set at 2.3 billion yuan [2] Product and Market Performance - In 2024, the revenue from high-end, mid-range, and low-end products was 1.529 billion, 506 million, and 134 million yuan respectively, with year-on-year changes of +4.27%, -8.17%, and -20.53% [2] - The proportion of mid-range and low-end products is decreasing, indicating a trend towards structural upgrading [2] - In Q1 2025, the revenue from high-end, mid-range, and low-end products was 620 million, 134 million, and 34 million yuan respectively, with year-on-year changes of +8.77%, -30.75%, and -40.94% [3] - The high-end product proportion reached 78.67% in Q1 2025, continuing to increase [3] Market Dynamics - In Q1 2025, the company's revenue from domestic and external markets was 695 million and 93 million yuan respectively, with year-on-year changes of +3.49% and -37.86% [3] - The domestic market remains stable, while the external market is experiencing a temporary decline [3] Channel Performance - In Q1 2025, revenue from direct sales, online sales, and wholesale agents was 197 million, 43 million, and 548 million yuan respectively, with year-on-year changes of +69.89%, +0.65%, and -17.27% [3] - The number of distributors decreased by 14 to 57 by the end of 2024, while the average distributor scale increased by 3.05% [3] Profitability Metrics - In Q1 2025, the gross profit margin and net profit margin decreased by 3.12 and 1.27 percentage points to 48.77% and 18.04% respectively, attributed to increased discounts during the Spring Festival [4] - The sales expense ratio, management expense ratio, and financial expense ratio changed by -1.42, +0.31, and +0.45 percentage points to 5.21%, 3.34%, and 0.59% respectively [4] Future Outlook - The company is expected to gradually improve its operating conditions following the implementation of a new marketing strategy, with a focus on stabilizing the domestic market [4] - The profit forecasts for 2025 and 2026 are adjusted to 314 million and 348 million yuan respectively, with growth rates of 10% and 11% [4]

Investment Rating - The investment rating for the company is "Buy" with a target price set for the next six months [5][17]. Core Views - The company is experiencing a structural upgrade in its product offerings, with a focus on high-end products, despite a temporary slowdown in growth. The revenue target for 2025 is set at 2.3 billion yuan [1][3]. - The company has shown resilience in its domestic market, with high-end product sales increasing, while facing challenges in external markets [2][3]. - The company is expected to gradually improve its operational performance as it clears channel risks and implements new marketing strategies [3]. Financial Performance Summary - For 2024, the company expects revenues of 2.2 billion yuan, a slight decrease of 1.27% year-on-year, with a projected recovery in 2025 to 2.3 billion yuan [4][11]. - The company's gross profit margin is expected to improve to 52.30% in 2025, while the net profit margin is projected to be 13.59% [11][12]. - The company reported a dividend payout ratio of 54.40% for 2024, slightly up from 53.24% in 2023 [1]. Product and Market Analysis - In Q1 2025, the revenue from high-end products reached 620 million yuan, representing an increase of 8.77% year-on-year, while mid and low-end products saw significant declines [2][3]. - The domestic market remains stable, with revenue from the domestic market at 695 million yuan, up 3.49% year-on-year, while external market revenue dropped by 37.86% [2][3]. - The company is focusing on increasing its direct sales and online sales channels, with direct sales revenue growing by 69.89% in Q1 2025 [2][3].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's performance in 2024 and Q1 2025 met expectations, showing resilient growth [7] - In 2024, total revenue reached 23.58 billion yuan, a year-on-year increase of 16.41%, while net profit attributable to shareholders was 5.52 billion yuan, up 20.22% year-on-year [7] - The company maintained strong performance in its home province of Anhui, with significant growth in various product lines and regions [7] - Profitability continued to improve due to structural upgrades and cost optimization, with a net profit margin of 24.20% in 2024, up 0.87 percentage points year-on-year [7] - The company is expected to sustain its growth momentum in 2025, with updated net profit forecasts of 6.20 billion yuan for 2025 and 7.00 billion yuan for 2026 [7] Financial Summary - Total revenue projections for the company are as follows: 26.25 billion yuan in 2025, 29.27 billion yuan in 2026, and 32.55 billion yuan in 2027, with respective growth rates of 11.34%, 11.50%, and 11.20% [1][8] - Net profit attributable to shareholders is projected to be 6.20 billion yuan in 2025, 7.01 billion yuan in 2026, and 7.83 billion yuan in 2027, with growth rates of 12.35%, 13.14%, and 11.59% respectively [1][8] - The company's earnings per share (EPS) are expected to be 11.73 yuan in 2025, 13.27 yuan in 2026, and 14.81 yuan in 2027 [1][8] - The current price-to-earnings (P/E) ratio is projected to be 14.25 for 2025, 12.59 for 2026, and 11.29 for 2027 [1][8]