Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [6]. Core Views - The company continues to face pressure on performance, with a significant decline in revenue and net profit in Q1 2025. Revenue decreased by 32.3% year-on-year to 1.79 billion yuan, and net profit fell by 37.4% to 450 million yuan [1][4]. - The company is focusing on new product launches in Q2 to stimulate sales and improve performance, particularly in the offline channel [4]. Summary by Sections Financial Performance - In Q1 2025, the main brand "汤臣倍健" generated revenue of 983 million yuan, down 36.37% year-on-year. The "健力多" brand saw a revenue drop of 46.15% to 201 million yuan, while Life-Space's domestic products generated 77 million yuan, a decrease of 36.19% [2]. - The company's gross margin for Q1 2025 was 68.66%, a decline of 1.24 percentage points year-on-year, attributed to a higher proportion of low-margin products and increased fixed costs due to lower revenue [3]. - The sales expense ratio was 30.29%, down 0.91 percentage points year-on-year, reflecting effective cost control measures [3]. Future Outlook - The company plans to launch new products in Q2, targeting essential consumer needs and enhancing offline channel performance through promotional activities [4]. - The profit forecasts for 2025-2027 have been revised downwards to 791 million yuan, 921 million yuan, and 1.024 billion yuan, respectively, reflecting a cautious outlook due to ongoing weak demand [4]. Valuation Metrics - The current stock price corresponds to a PE ratio of 23x for 2025, 20x for 2026, and 18x for 2027, indicating the company's position as a leader in the dietary supplement industry with growth potential [4].

Core Insights - The Trump administration has exempted certain vitamins and supplement ingredients from tariffs, responding to calls from the Natural Products Association for the removal of tariffs on health-promoting vitamins, minerals, and amino acids [1][2] - The exemption includes essential vitamins such as A, C, E, various B vitamins, and minerals like zinc, iron, magnesium, calcium, and manganese, as well as CoQ10 [2] - The exemption is significant for the CoQ10 market, with one Chinese company exporting $326 million worth of CoQ10 to the U.S. in 2024, highlighting the growing demand for heart health supplements in the U.S. [3] Industry Context - Cardiovascular disease is the leading cause of death in the U.S., with 702,880 deaths in 2022, equating to one in five deaths, and a financial loss of approximately $252.2 billion from 2019 to 2020 due to medical services and productivity losses [3] - CoQ10 has been recognized by the National Institutes of Health as a supplement that can reduce the risk of complications from heart surgery, indicating its importance in the healthcare landscape [5] - A 12-year study involving 443 participants showed that CoQ10 supplementation significantly reduced mortality rates from cardiovascular diseases by 17%, blood pressure-related diseases by 18%, and diabetes by 25% [7] Technological Advancements - A breakthrough in CoQ10 technology by a team from the Shanghai Institute of Materia Medica has improved the stability and bioavailability of reduced CoQ10, making it more effective for health applications [12][14] - This innovation allows for the production of a more stable form of CoQ10, which can maintain over 98% content even under high temperature and humidity conditions for six months, enhancing absorption rates significantly [14] Market Opportunities - The tariff exemption aligns with the high prevalence of cardiovascular diseases in the U.S. and the increased demand for heart-healthy supplements, creating substantial market opportunities for Chinese dietary supplement companies [12] - The combination of U.S. health needs and advancements in CoQ10 technology positions China to enhance its influence in the global health supplement market [12]