Core Viewpoint - The company reported its 2024 annual report and Q1 2025 results, showing performance slightly below market expectations, with revenue growth but significant declines in net profit and cash flow metrics [1][4]. Financial Performance - 2024 revenue reached 5.736 billion yuan, a year-on-year increase of 3.87%, while net profit attributable to shareholders was 503 million yuan, down 33.53% year-on-year [1]. - Q1 2025 revenue was 949 million yuan, a year-on-year decline of 13.51%, with net profit attributable to shareholders at 28 million yuan, down 83.97% year-on-year [1]. - The company declared a cash dividend of 6.00 yuan per 10 shares (including tax) [1]. Profitability and Cost Structure - The gross margin for 2024 was 73.74%, a decrease of 0.16 percentage points year-on-year, while the net profit margin was 8.63%, down 5.12 percentage points year-on-year [1]. - The sales expense ratio increased to 49.97%, up 2.71 percentage points year-on-year, primarily due to increased brand promotion and online channel costs [1]. - The management expense ratio rose to 8.94%, up 1.46 percentage points year-on-year, attributed to depreciation and personnel costs [1]. Segment Performance - In 2024, skincare revenue was 4.801 billion yuan, down 1.42% year-on-year, while color cosmetics revenue surged to 551 million yuan, a growth of 226.51% year-on-year [2]. - Online channel revenue reached 3.912 billion yuan, up 10.13% year-on-year, with Douyin platform revenue growing by 30.96% to 827 million yuan [2]. Strategic Focus - The company is deepening its "sensitive skin PLUS" strategy, focusing on core products that enhance brand value and sales [3]. - The 2025 strategy will emphasize brand building, membership operations, and collaborative growth, with a focus on scientific communication and emotional content [3]. - The brand matrix includes various sub-brands targeting specific demographics, enhancing market penetration [3][4]. Future Outlook - The company has adjusted its profit forecasts for 2025-2026 and introduced a new forecast for 2027, expecting net profits of 667 million, 769 million, and 899 million yuan respectively [4]. - The price-to-earnings ratio is projected to be 26, 23, and 20 times for 2025, 2026, and 2027 respectively [4].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company has released its 2024 annual report and Q1 2025 quarterly report, with performance slightly below market expectations. 2024 revenue was 5.736 billion yuan, a year-on-year increase of 3.87%, while net profit attributable to shareholders was 503 million yuan, a year-on-year decline of 33.53% [4][6] - In Q1 2025, revenue was 949 million yuan, a year-on-year decline of 13.51%, and net profit attributable to shareholders was 28 million yuan, a year-on-year decline of 83.97% [4][6] - The company plans to focus on brand building, member operations, and overall collaborative growth in 2025, with a strategic emphasis on sensitive skin products [6] Financial Data and Profit Forecast - The company’s total revenue for 2024 is projected at 5.736 billion yuan, with a forecasted revenue of 6.281 billion yuan for 2025, representing a year-on-year growth rate of 9.5% [5] - The net profit attributable to shareholders is expected to be 667 million yuan in 2025, with a projected growth rate of 32.6% [5] - The gross profit margin for 2024 was 73.7%, with an expected margin of 74.9% in 2025 [5] Operational Insights - The company’s skincare segment showed resilience despite pressure, with skincare revenue at 4.801 billion yuan in 2024, a year-on-year decline of 1.42% [6] - The makeup segment experienced significant growth, with revenue increasing by 226.51% to 551 million yuan, accounting for 9.60% of total revenue [6] - Online sales channels drove overall resilience, with revenue from online channels reaching 3.912 billion yuan, a year-on-year increase of 10.13% [6] Strategic Focus - The company is deepening its "Sensitive Skin PLUS" strategy, focusing on core products that enhance brand value and sales [6] - The brand matrix includes various sub-brands targeting specific demographics, such as infants and anti-aging products, to achieve precise market coverage [6] - The organizational restructuring is expected to bring positive changes, with a focus on high-end and mass-market segments [6]

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company is steadily advancing transformation and optimization, with expectations for multi-brand contributions to incremental growth [1] - The main brand continues to deepen its focus on sensitive skin, while the multi-brand layout is expected to contribute additional growth [2] - Online channel optimization is improving operational efficiency, and offline channels are steadily expanding to reach more customers [3] - The brand matrix is essentially complete, and the main brand is continuously optimizing its product structure, with self-research and investment in multi-brands poised to contribute to a second growth peak [4] Financial Performance Summary - In 2024, the company is projected to achieve revenue of 5.736 billion yuan, a year-on-year increase of 3.87%, and a net profit attributable to shareholders of 503 million yuan, a decrease of 33.53% [1] - The gross profit margin is expected to remain stable at approximately 73.74% [1] - For Q1 2025, the company is expected to report revenue of 949 million yuan, a year-on-year decrease of 13.51%, with a net profit of 28 million yuan, a decrease of 83.97% [1] - The company anticipates revenue growth of 6.368 billion yuan in 2025, with net profits of 751 million yuan, reflecting a significant recovery in profitability [4] Brand and Product Performance Summary - The skincare category accounts for 84.13% of the company's self-owned brand sales, with the main brand Winona performing well in the sensitive skin segment [2] - Winona Baby brand achieved revenue of 200 million yuan, a year-on-year increase of 34.03%, while the Aikeman brand saw revenue growth of 65.59% [2] - The company is focusing on private domain member operations, achieving high repurchase rates, particularly among the 18-30 age group targeted by the Beifuting brand [2] Channel Strategy Summary - The company’s online, OMO, and offline channels account for 68.55%, 9.13%, and 22.32% of its main business, respectively [3] - Online sales from major platforms such as Alibaba and Douyin have shown varied performance, with Douyin sales increasing by 31% [3] - The company has expanded its offline distribution, covering over 129,000 pharmacy stores nationwide and opening 179 new brand stores [3] Future Earnings Forecast - Revenue projections for 2025-2027 are set at 6.368 billion yuan, 7.198 billion yuan, and 8.200 billion yuan, respectively, with net profits expected to recover to 751 million yuan, 924 million yuan, and 1.031 billion yuan [4][6]