Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Views - The company is expected to benefit from the divestiture of inefficient businesses and aims for a leaner operation in 2025, with a projected recovery in profitability [12] - In 2024, the company reported a revenue of 3.04 billion yuan, a year-on-year increase of 4.1%, but a net loss attributable to shareholders of 310 million yuan [5][12] - The company anticipates a rebound in profits in 2025, with net profits projected at 160 million yuan, and earnings per share (EPS) expected to be 0.43 yuan [12] Revenue Performance - The company achieved a revenue of 3.04 billion yuan in 2024, with a year-on-year growth of 4.1% [5] - The first quarter of 2025 saw a revenue of 690 million yuan, a year-on-year decrease of 7.8% [6] - The revenue breakdown by brand shows that ELLASSAY, LAUREL, and IRO had varying performances, with IRO facing challenges in overseas markets [7][8] Profitability Metrics - The gross margin for 2024 decreased by 0.4 percentage points to 67.4% [9] - The company’s operating profit for 2024 was reported at -238 million yuan, with a projected recovery to 243 million yuan in 2025 [16] - The report indicates a significant increase in asset impairment losses in 2024, which impacted profitability [11] Financial Forecasts - The company’s net profit forecasts for 2025, 2026, and 2027 are 160 million yuan, 240 million yuan, and 330 million yuan respectively [12] - The projected EPS for the same years is 0.43 yuan, 0.65 yuan, and 0.91 yuan [12] - The report anticipates a decrease in the price-to-earnings (P/E) ratio from 24 in 2023 to 16 in 2025 [19] Operational Adjustments - The company plans to continue adjusting its overseas business operations and expects to see reduced impacts from the IRO brand in 2025 [12] - The total number of stores decreased by 14.5% by the end of March 2025, primarily due to the divestiture of the EH brand [8] Market Position - The company’s market capitalization is reported at 2.573 billion yuan, with a total share capital of 369 million shares [1] - The stock price as of the report is 6.97 yuan, with a 52-week range of 5.72 to 9.23 yuan [1]