Jason Furniture (Hangzhou) (SH:603816) Xin Lang Zheng Quan·2025-05-23 11:06Core Viewpoint - The real estate market in China is experiencing a significant downturn, with new housing sales and revenue declining sharply, leading to a shift in consumer preferences towards renovation and home improvement services, which are currently fragmented and slow to respond to market needs [1][2]. Group 1: Real Estate Market Performance - In 2024, the total sales area of new commercial housing reached 97.385 million square meters, a year-on-year decrease of 12.9%, while sales revenue totaled 967.5 billion yuan, down 17.1% [1]. - Residential sales area and revenue fell by 14.1% and 17.6% respectively compared to 2023 [1]. - The building materials and home furnishing market saw a sales decline of 3.9% to 1.49 trillion yuan, with market area decreasing by 9.6%, marking the third consecutive year of negative growth [1]. Group 2: Company Performance - In 2024, the company achieved total revenue of 12.966 billion yuan, a slight decline of 4.0%, with net profit dropping 40.8% to 769 million yuan, the lowest since its listing in December 2019 [1][2]. - The company's net profit has seen a double-digit decline for three consecutive years from 2022 to 2024 [2]. Group 3: Business Model and Expansion - The company has only added four self-owned stores over six years, while rental stores have decreased significantly, with a cumulative decline of 16.5% in number and 22.7% in area [3][4]. - The company is transitioning from scale expansion to quality improvement by increasing self-owned and entrusted management stores, while reducing rental and franchise stores [4]. Group 4: Revenue Composition - The rental and management income fell below 6 billion yuan for the first time, contributing approximately 42.7% to total revenue, down from 82.3% in 2019 [6]. - Product sales revenue increased by 13.8% to 6.324 billion yuan, nearly 14 times the 2019 level, driven by the merger with Wuhan Zhongshang and a focus on high-value smart home products [6][7]. Group 5: Financial Metrics - The company's operating costs increased by 5.6% to 9.419 billion yuan, with a significant drop in gross margin to 27.4%, down 6.8 percentage points year-on-year [9]. - The net profit margin for 2024 was reported at 6.4%, a decrease of 3.5 percentage points compared to the previous year [14]. Group 6: Investment and Debt Management - The company invested 1.963 billion yuan to acquire the Ruihong project, increasing its investment property scale by 21.9% to 22.947 billion yuan [15]. - The asset-liability ratio improved to approximately 57.8%, but the company still faces short-term debt risks with a cash coverage ratio of only 53.5% [16].