Breo(688793) 申万宏源·2024-10-30 08:15Investment Rating - The investment rating for the company is "Outperform" [7] Core Insights - The company's Q3 2024 performance was below expectations, with a revenue of 833 million yuan, a year-on-year decline of 11.16%. The net profit attributable to the parent company was 13 million yuan, showing a positive turnaround compared to the previous year [5][7] - The company achieved a record high gross margin of 66.80% in Q3 2024, an increase of 2.94 percentage points year-on-year, primarily due to improvements in product mix [7] - The company has adjusted its profit forecasts downward, expecting net profits of 27 million yuan, 65 million yuan, and 97 million yuan for 2024, 2025, and 2026 respectively, with significant growth rates projected [7] Summary by Sections Financial Performance - For Q1-Q3 2024, the company reported total revenue of 837 million yuan, a decrease of 11.2% year-on-year. The net profit attributable to the parent company was 13 million yuan, marking a return to profitability [5][11] - Q3 2024 saw a revenue of 233 million yuan, down 32% year-on-year, with a net loss of 13 million yuan [5][7] Sales Channels - Online sales faced pressure with a 39% year-on-year decline due to high base effects from the previous year. The company is optimizing its offline channel strategy, having opened 133 direct-operated stores and 63 dealer stores as of June 30, 2024 [6][7] - The company is expanding its market presence through provincial retail service providers, targeting second and third-tier cities [6] Cost Structure - The sales expense ratio increased to 59.99%, up 6.37 percentage points year-on-year, attributed to fixed costs despite declining revenues. The management expense ratio also rose to 7.25% [7] - The company recorded a net profit margin of -5.59% in Q3 2024, a decline of 8.22 percentage points year-on-year [7] Future Outlook - The company maintains an "Outperform" rating despite the downward revision of profit forecasts, with a projected PEG ratio of 1.14 for 2024, indicating a potential upside of 9% from the current market value [7]