JONJEE(SH:600872) Huachuang Securities·2024-08-09 06:31Investment Rating - The report maintains a "Strong Buy" rating for Zhongju Gaoxin (600872) with a target price of 31.35 CNY, compared to the current price of 19.80 CNY [1]. Core Views - The company reported a revenue of 2.618 billion CNY for H1 2024, a year-on-year decrease of 1.35%, but achieved a net profit of 350 million CNY, marking a return to profitability [1]. - Q2 revenue was 1.134 billion CNY, down 11.96% year-on-year, with the main product line, Meiwai Xian, facing challenges due to macroeconomic conditions and intensified industry competition [1]. - The company is focused on strategic reforms and operational adjustments, aiming for a return to normal growth in the second half of the year [1]. Financial Summary - Total revenue for 2023 is projected at 5.139 billion CNY, with a year-on-year decline of 3.8%. Revenue is expected to grow to 5.794 billion CNY in 2024, representing a 12.7% increase [9]. - The net profit for 2023 is estimated at 1.697 billion CNY, with a significant year-on-year growth of 386.5%. However, a decline of 37.4% is expected in 2024, bringing the net profit down to 1.062 billion CNY [9]. - Earnings per share (EPS) is forecasted to be 2.17 CNY for 2023, decreasing to 1.36 CNY in 2024, and then recovering to 2.03 CNY in 2025 [9]. Operational Insights - The company has added 104 new distributors in the current period, with a development rate of 95% in prefecture-level cities and 70% in county-level areas [1]. - The gross margin for Q2 was 36.2%, an increase of 3.6 percentage points year-on-year, attributed to lower raw material costs and improved operational efficiency [1]. - The sales expense ratio increased by 6.4 percentage points year-on-year in Q2, reflecting higher investments in channel reform and marketing efforts [1].