Rongtai health(603579) 国投证券·2025-04-25 12:08Investment Rating - The investment rating for the company is "Buy-A" with a target price of 29.75 CNY for the next six months [5]. Core Views - The company reported a revenue of 1.6 billion CNY in 2024, a year-over-year decrease of 13.9%, and a net profit attributable to shareholders of 190 million CNY, down 5.3% year-over-year. The revenue for Q4 2024 was 430 million CNY, down 22.3% year-over-year, while the net profit for the same quarter was 50 million CNY, down 3.0% year-over-year. In Q1 2025, the company achieved a revenue of 390 million CNY, a slight decrease of 1.4% year-over-year, with a net profit of 40 million CNY, down 30.0% year-over-year [2][3]. Summary by Sections Revenue Performance - The company's Q1 revenue decline has narrowed, with domestic sales benefiting from the old-for-new subsidy policy, leading to improved consumption of massage chairs. Online sales for the company's brands increased by 7.4% year-over-year in Q1 [3]. - The company has established a strategic partnership with a leading global parts supplier, which is expected to enhance its automotive massage seat business [3]. Profitability - The net profit margin for Q1 was 11.1%, a decrease of 4.5 percentage points year-over-year. This decline in profitability is attributed to a decrease in gross margin and an increase in financial expense ratio due to currency exchange losses [3]. Cash Flow - The operating cash flow for Q1 improved, with a net outflow of 30 million CNY compared to 150 million CNY in the same period last year. The cash collection from sales increased by 8.6% year-over-year, and inventory levels decreased by 23.4% year-over-year [4]. Future Outlook - The company is expected to see a recovery in domestic sales as consumer sentiment improves, and overseas sales are anticipated to continue rising. The projected EPS for 2025, 2026, and 2027 are 1.19 CNY, 1.38 CNY, and 1.58 CNY respectively [4][5].