Core Viewpoint - The company reported a decline in revenue and net profit for 2024, but showed signs of recovery in Q1 2025 with a slight increase in revenue and net profit [1][2]. Financial Performance - 2024 annual revenue was 4.237 billion yuan, down 5.69% year-on-year; net profit attributable to shareholders was 110 million yuan, down 62.63% year-on-year; and net profit excluding non-recurring items was 118 million yuan, down 56.74% year-on-year [1]. - Q4 2024 revenue was 1.192 billion yuan, up 6.86% year-on-year; net profit attributable to shareholders was 16 million yuan, down 86.33% year-on-year; and net profit excluding non-recurring items was 10 million yuan, down 86.79% year-on-year [1]. - Q1 2025 revenue was 1.085 billion yuan, up 5.19% year-on-year; net profit attributable to shareholders was 42 million yuan, up 4.67% year-on-year; and net profit excluding non-recurring items was 41 million yuan, down 22.78% year-on-year [1]. Profitability Metrics - 2024 annual gross margin was 63.01%, up 4.57 percentage points year-on-year; net profit margin was 2.60%, down 3.95 percentage points year-on-year [2]. - Q1 2025 gross margin was 63.76%, up 2.42 percentage points year-on-year; net profit margin was 3.86%, down 0.02 percentage points year-on-year [2]. Expense Ratios - 2024 annual sales expense ratio was 49.06%, up 7.71 percentage points year-on-year; management expense ratio was 6.15%, up 0.91 percentage points year-on-year; R&D expense ratio was 1.94%, up 0.24 percentage points year-on-year [2]. - Q1 2025 sales expense ratio was 49.55%, up 3.24 percentage points year-on-year; management expense ratio was 5.77%, up 0.11 percentage points year-on-year; R&D expense ratio was 1.92%, up 0.17 percentage points year-on-year [2]. Strategic Initiatives - The company is focusing on self-owned brands and has established a "global new high-end luxury beauty group" label, with significant growth in both online and offline channels [2]. - The company is increasing R&D investment, with R&D expenses accounting for 4.98% of self-owned brand revenue, and has established a research institute for innovative product development [3]. - A share buyback plan of 50 to 100 million yuan is proposed to implement employee stock ownership plans or equity incentives [3]. Future Outlook - The company has revised its revenue and profit forecasts for 2025-2027, expecting revenues of 4.389 billion, 4.871 billion, and 5.537 billion yuan, and net profits of 256 million, 295 million, and 345 million yuan respectively [3]. - The company aims to penetrate the high-end market through brand transformation and innovation, maintaining a "buy" rating [3].

Investment Rating - The investment rating for the company is "Outperform the Market" [6][4][19] Core Views - The company achieved a revenue of 10.778 billion with a year-on-year growth of 21.04% and a net profit of 1.552 billion, reflecting a year-on-year increase of 30% in 2024. The profit growth is attributed to cost reduction and efficiency improvements, solidifying its position as a leading domestic beauty brand [1][7][4] - The company is leveraging its main brand's single product strategy and the rapid rise of emerging brands to build a strong brand matrix, gradually advancing towards becoming a beauty group [4][19] - The company is expected to increase its marketing investments due to the intensified product launches in the second quarter of this year and the continuous incubation of new brands [4][19] Revenue and Profitability - In 2024, the main brand Proya generated revenue of 8.581 billion, growing by 19.55% year-on-year, while the online channel revenue reached 10.234 billion, with a year-on-year increase of 23.68% [2][9] - The gross profit margin for 2024 was 71.39%, an increase of 1.46 percentage points year-on-year, driven by product structure optimization and reduced costs [12][3] - The company plans to distribute a cash dividend of 11.90 per 10 shares, which accounts for 40.07% of the net profit [7][1] Financial Forecasts - The company forecasts revenues of 12.428 billion, 13.993 billion, and 15.449 billion for 2025, 2026, and 2027 respectively, with corresponding net profits of 1.869 billion, 2.144 billion, and 2.388 billion [5][21] - The projected PE ratios for 2025, 2026, and 2027 are 18, 16, and 14 respectively [4][21] Brand and Channel Performance - The emerging brands OR and Original Color Pot achieved revenue growth rates of 71.14% and 138.36% respectively, enhancing the overall brand matrix competitiveness [2][8] - The online direct sales and distribution channels saw revenue increases of 20.35% and 38.40% respectively, while offline channel revenue decreased by 13.63% [9][2]