JONJEE(SH:600872) HTSC·2024-07-10 06:02Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 27.60 [7][5]. Core Views - The company is expected to achieve revenue of approximately RMB 26.2 billion in H1 2024, a year-on-year decrease of 1.3%, and a net profit attributable to shareholders of RMB 3.15 to 3.78 billion, marking a turnaround from a loss of RMB 14.4 billion in H1 2023 [2][3]. - The main business is undergoing a reform phase, which has led to short-term challenges, particularly in the seasoning business, where Q2 revenue is expected to decline by about 11% year-on-year due to channel reform and external market pressures [3][4]. Summary by Sections Revenue and Profit Forecast - For 2024, the company is projected to have revenues of RMB 5.549 billion, with a year-on-year growth of 7.97% [6]. - The net profit attributable to shareholders is forecasted to be RMB 723.13 million, a decrease of 57.39% compared to 2023 [6]. Earnings Per Share (EPS) and Valuation - EPS is expected to be RMB 0.92 in 2024, with projections of RMB 1.21 and RMB 1.45 for 2025 and 2026 respectively [5][6]. - The report suggests a reference PE of 30x for 2024, leading to a target price of RMB 27.60 [2][5]. Operational Challenges - The company is currently in a transitional phase with its channel reform, which has resulted in operational difficulties and increased marketing expenses, impacting profitability [3][4]. - The net profit margin for Q2 is projected to be 8.8%, down 3.0 percentage points year-on-year, primarily due to increased advertising and promotional expenses [4]. Future Outlook - The report anticipates improvements in both internal and external environments, which could enhance the company's performance in the coming years [5].