JONJEE(SH:600872) Huafu Securities·2024-08-09 05:30Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% relative to the market benchmark within the next six months [11]. Core Insights - The company reported a revenue of 2.618 billion yuan for H1 2024, a year-on-year decrease of 1.35%, but achieved a net profit of 350 million yuan, marking a return to profitability [2]. - The Q2 revenue was 1.134 billion yuan, down 11.96% year-on-year, with a net profit of 111 million yuan and a non-recurring net profit of 103 million yuan, which is a 32.37% decline year-on-year [2]. - The company is focusing on core product categories and launching healthier products to address declining sales in key categories such as soy sauce and chicken essence, which saw revenue declines of 22% and 15% respectively in Q2 [2][3]. - The company is expanding its e-commerce business, with direct sales growing by 23% year-on-year, while distribution sales fell by 20% [2]. Financial Performance Summary - The gross margin for Q2 was 36.17%, an increase of 3.64 percentage points year-on-year, attributed to lower raw material costs and improved product mix [3]. - However, total expenses increased significantly, with a combined expense rate rising by 8.38 percentage points year-on-year, primarily due to increased promotional spending [3]. - The company forecasts net profits of 720 million yuan, 900 million yuan, and 1.16 billion yuan for 2024, 2025, and 2026 respectively, with expected growth rates of -57%, 25%, and 28% [3]. Strategic Outlook - The company is undergoing deep reforms aimed at enhancing operational efficiency and market coverage, with a strategic goal for its subsidiary, Meiwai Xian, to achieve revenues of 10 billion yuan by 2026 [3]. - Despite current challenges, the company anticipates a recovery in sales performance in H2 2024, driven by seasonal demand and improved execution from its business units [3].