潮宏基（002345）：2025年第一季度净利润率上升；看好估值重估。

1Q25NPM Up; Bullish AboutValuation Re-rating Rating (Maintain):BUYTarget price (RMB):11.80 Huatai Research Annual Results Review 18 May 2025│China (Mainland) Retail AnalystFAN JunhaoSAC No. S0570524050001SFC No. BDO986fanjunhao@htsc.com+(852) 3658 6000 GuangdongChjIndustryreleased2024and1Q25results:for2024,revenue/attributable NP came in at RMB6,518/194mn (+10.5/-41.9%yoy), with thedecline in the latter chiefly dragged by goodwill impairment for the women’s bagbusiness. Barring such impact, the 2024 attributable NP would be RMB350mn(-5.1%yoy).For1Q25,revenue/attributableNPwereRMB2,252/189mn(up25.4/44.4%yoy), a stellar performance. The company proposes cash dividend ofRMB0.25/share (tax included), making the full-year total payout ratio at160.59%should the interim dividend payment be accounted for.Positioned as abrandcatering to the needs of fashionable youth,the company has established adifferentiated product portfolio via its intangible cultural heritage process andfashion design. We think the company’s rising product power should well position itto transform from a channel distributor to a branded merchandiser. Maintain BUY. AnalystHUI PuSAC No. S0570524090006SFC No. BSE005huipu@htsc.com+(86) 21 2897 2228 Key data GPM edged down on product-mix changes; 1Q25 NPM upIts jewelry business revenue/operating profit (OP) came up13.3/12.8% yoy in 2024,outpacing the growth rate (9.8%) for the gold jewelry market (perGem & JewelryTrade Association of China). Notably, growth paced up in 4Q24, with revenue/OPfrom the company’s branded business up21.6/27.0%yoy. By channel, for 2024,self-operated/franchise channel revenues were RMB3,017/3,280mn (-7.4/+32.4%yoy), with GPMs of 31.6/17.3%. The2024/1Q25 overall GPM sank 2.4/2.0pp yoy,chiefly due to rising revenue contribution from the low-margin weight-based goldproducts. The 2024/1Q25 expense ratios fell 2.5/3.1pp yoy. With improving spendingefficiency, the 1Q25 NPM rose 1.1pp yoy to 8.4%. Fashionable & differentiated positioning to win consumer mindshareTheChj brand targets young consumers aged 25-40 as its core customer base. By blending oriental culture with modern fashion, it has deeply ingrained its brand imageof‘youthful, stylish,and playful’in consumers' minds, ranking among China's top 500most valuable brands for 21 consecutive years.The company's intangible culturalheritage-inspired filigree series boasts exquisite craftsmanship and elegant designs,aligning with the trend of consumers' willingness to pay for artistry and design amidhigh gold prices. Additionally, the company offers heavy-weight product lines such as‘Zhenjin·Fanhua’and IP collaboration collections featuring Sanrio, Doraemon, andother popular franchises. These initiativesshould in our viewdrive higherAOVandeffectivelyoffsetgold price volatility, supporting the company's operational resilienceduring industrydownturns. Source:Wind Earnings forecasts and valuationWeliftour2025/2026/2027attributable NPestimatesby16/23/-%toRMB500/610/730mn(up160/21/20%yoy).Consideringitsrobustgrowthmomentum backed by strong product and brand power, we value the stock at 21x2025E PE, above its peers’average of 19x on iFind consensus, for our target priceof RMB11.8 (previous: RMB6.9, on 14x 2025E PE). Risks:disappointing store expansion; volatile gold prices; intensifying competition. Source:Wind,Huatai Research Source:Wind,Huatai Research Fullfinancials Disclaimers Analyst CertificationI/We, FAN Junhao, HUI Pu, hereby certify that the views expressed in this report accurately reflect the personal views of the analyst(s) about the subject securities or issuers; and no part of the compensation of the analyst(s) was, is, or will be, directly orindirectly, related to the inclusion of specific recommendations or views in this report. General Disclaimers and DisclosuresThis research report has been prepared by Huatai Financial Holdings (Hong Kong) Limited (hereinafter referred to as “HFHL”).The information herein is strictly confidential to the recipient. This report is intended for HFHL, its clients and associatedcompanies. Any other person shall not be deemed a client of the Company merely from his or her receipt of this report. This report is based on information deemed reliable and publicly available by HFHL, but HFHL and its associated company(ies)(collectively, hereinafter“Huatai”)makes no guarantee as to the accuracy or completeness of such information. The opinions, assessments and projections contained herein only reflect the views and judgments at the issuance date. Huataimay issue research reports that contain inconsistent views, assessments and projections with those set out herein at differenttimes. The prices, values and investment returns of the securities or investment instruments referred to herein may fluctuate.Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital mayoccur.Huatai makes no warrantsthat the information