Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Views - In 2024, the company achieved operating revenue of 10.275 billion yuan, a year-on-year increase of 56.55%, while the net profit attributable to the parent company was 214 million yuan, a decrease of 36.19% [2][4]. - In Q4 2024, the company reported operating revenue of 3.474 billion yuan, up 58.66% year-on-year, but the net profit attributable to the parent company dropped by 83.46% to 19 million yuan [2][4]. - For Q1 2025, the company generated operating revenue of 2.458 billion yuan, reflecting a year-on-year increase of 36.65%, with a net profit of 47 million yuan, down 45.35% [2][4]. Summary by Sections Financial Performance - The company’s revenue from apparel maintained rapid growth, with a 57% year-on-year increase in 2024. The apparel and non-apparel categories grew by 59% and 34% respectively [10]. - Key brands such as Coofandy, Ekouaer, Avidlove, and Zeagoo saw significant growth, with Zeagoo achieving a doubling in sales [10]. - The gross profit margin was 43.8%, a decline of 2.1 percentage points, primarily due to high shipping costs and the impact of hardware inventory reduction [10]. - In Q1 2025, the company continued to show strong revenue growth despite a high base, with a gross profit margin decrease of 3.3 percentage points attributed to hardware inventory reduction [10]. Inventory and Cost Management - The company’s inventory levels decreased consistently, with figures of 2.1 billion yuan, 1.8 billion yuan, and 1.6 billion yuan for Q3 2024, Q4 2024, and Q1 2025 respectively [10]. - The sales expense ratio increased due to higher promotional costs in the previous year, contributing to a decline in net profit margin by 3.0 percentage points [10]. Future Outlook - The company is expected to maintain its growth trajectory in the apparel sector, with projected net profits of 410 million yuan, 490 million yuan, and 560 million yuan for 2025, 2026, and 2027 respectively [10].

Core Viewpoint - The company reported a significant increase in revenue for 2024, but a decline in net profit, indicating challenges in profitability due to intensified competition and rising costs [1][3]. Financial Performance - In 2024, the company achieved revenue of 10.28 billion, a year-on-year increase of 56.5%, while net profit attributable to shareholders was 210 million, a decrease of 36.2% [1]. - For Q1 2025, revenue reached 2.46 billion, up 36.6%, with net profit of 47.03 million, down 45.3%, aligning with market expectations [1]. - Quarterly revenue growth for 2024 was 44.7% in Q1, 55.5% in Q2, 63.9% in Q3, and 58.7% in Q4, while net profit showed fluctuations, with a notable decline in Q4 [1]. Business Segments - The apparel segment is expected to continue rapid growth, with 2024 revenue projected at 7.45 billion, a 59.4% increase, driven by strong performance from top brands [2]. - The top five brands accounted for 81% of apparel revenue, with sales growth of 50.4%, 61.9%, and 39% for the leading brands Coofandy, Ekouaer, and Avidlove respectively [2]. - Non-apparel revenue for 2024 is expected to reach 2.32 billion, a 33.9% increase, reflecting steady growth through focused category simplification [2]. Competitive Landscape - The company faces short-term pressure on profitability due to intense competition and increased promotional efforts, leading to a decline in gross margin [3]. - The gross margin for 2024 decreased by 2.1 percentage points to 43.8%, with apparel and non-apparel margins declining by 2.2 and 0.2 percentage points respectively [3]. - In Q1 2025, the gross margin was 43.9%, showing a year-on-year decline of 3.3 percentage points but a quarter-on-quarter increase of 2.4 percentage points [3]. Strategic Outlook - The company is positioned as a leading B2C cross-border e-commerce player in apparel, focusing on brand building and market expansion in non-US regions [3]. - Inventory levels are expected to rise by 125% in 2024, which may support operations amid uncertainties regarding US tariffs [3]. - Plans include leveraging core capabilities in apparel to enhance brand growth and market share, while also expanding supply chain operations to mitigate trade risks [3]. Earnings Forecast and Valuation - Due to competitive pressures and tariff uncertainties, the net profit forecast for 2025 has been reduced by 37% to 310 million, with a new forecast for 2026 at 430 million [4]. - The current stock price corresponds to a P/E ratio of 27 and 19 for 2025 and 2026 respectively, with a target price adjustment of 20% down to 24, indicating a potential upside of 16% [4].