Core Viewpoint - The company's performance has been under pressure due to slowing demand and increased competition, leading to a decline in revenue and net profit for 2024 and Q1 2025 [1][2][3] Financial Performance - In 2024, the company achieved revenue of 2.276 billion (yoy -5.16%) and a net profit of 562 million (yoy -23.33%) [1] - For Q1 2025, revenue was 397 million (yoy -44.29%) and net profit was 48 million (yoy -78.15%) [1] - The gross margin and net profit margin for 2024 decreased by 4.4 percentage points and 5.9 percentage points to 44.4% and 24.7%, respectively [1] - In Q1 2025, gross margin and net profit margin further declined by 13.8 percentage points and 18.8 percentage points to 34.0% and 12.1%, respectively [1] - Operating cash flow for 2024 was 823 million (yoy +3.08%), while Q1 2025 saw a negative operating cash flow of 12 million (yoy -107.36%) [1] Segment Performance - The cosmetics active ingredients and their raw materials segment generated revenue of 1.904 billion (yoy -8.05%), while synthetic fragrances achieved revenue of 352 million (yoy +14.16%) [2] - The gross margins for cosmetics active ingredients and synthetic fragrances were 49.22% and 20.80%, reflecting declines of 3.84 percentage points and 2.80 percentage points, respectively [2] - The company primarily relies on overseas sales, which accounted for 1.98 billion (yoy -8.30%) in 2024, while domestic sales reached 297 million (yoy +22.87%) [2] Strategic Response - In response to market challenges, the company is focusing on consolidating its leading position in the sunscreen sector, accelerating new product market breakthroughs, and increasing investment in formulation and application research [2] - The company is also enhancing its management systems and processes to improve operational efficiency and cost control, while advancing the construction of its overseas production base in Malaysia [2] Earnings Forecast and Investment Recommendation - The company is projected to have revenues of 2.06 billion, 2.26 billion, and 2.45 billion for 2025, 2026, and 2027, respectively, with net profits of 410 million, 490 million, and 560 million [3] - The current market capitalization corresponds to a PE ratio of 15X for 2026, maintaining a "buy" rating [3]

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company's performance is under pressure due to slowing demand and increased competition, with projected revenue for 2024 at 2.276 billion (down 5.16% YoY) and net profit at 562 million (down 23.33% YoY) [1] - The company is focusing on consolidating its leading position in the sunscreen market and accelerating the launch of new products while enhancing operational efficiency and cost control [2][3] Financial Performance Summary - Revenue and profit forecasts for 2025-2027 are adjusted to 2.06 billion, 2.26 billion, and 2.45 billion respectively, with net profits of 413 million, 493 million, and 562 million [3] - The company's gross margin is expected to decline to 41.3% in 2025, with a net margin of 20.0% [4] - Operating cash flow for 2024 is projected at 823 million, with a significant drop to -12 million in Q1 2025 due to revenue decline [1][4] Segment Performance Summary - The cosmetics active ingredients and raw materials segment is expected to generate 1.904 billion in revenue for 2024 (down 8.05% YoY), while synthetic fragrances are projected to grow by 14.16% YoY to 352 million [2] - The company’s overseas sales are projected to be 1.98 billion (down 8.30% YoY), while domestic sales are expected to increase by 22.87% to 297 million [2]