JACK(603337) 华西证券·2024-08-13 00:05Investment Rating - The report maintains an "Overweight" rating for the company [1] Core Views - The company's 2024 interim report shows significant improvement in profitability due to industry recovery and market share expansion [1] - Domestic demand accelerated in H1 2024, with Q2 revenue exceeding expectations [2] - Product structure optimization and cost reduction measures led to a substantial increase in net profit margin [3] - The company's industrial sewing machine business is expected to show strong growth elasticity [4] - The company's fast-response product strategy has gained market recognition, with new product launches achieving significant sales [5] Financial Performance Revenue - H1 2024 revenue reached 3.235 billion yuan, up 20% YoY, with Q2 revenue at 1.606 billion yuan, up 30% YoY [2] - Revenue breakdown by business: industrial sewing machines (2.802 billion yuan, +19% YoY), cutting and spreading machines (324 million yuan, +25% YoY), and automatic sewing equipment for shirts and jeans (100 million yuan, +33% YoY) [2] - Domestic revenue grew 42% YoY to 1.773 billion yuan, while overseas revenue increased 1% YoY to 1.454 billion yuan [2] Profitability - H1 2024 net profit attributable to shareholders was 417 million yuan, up 54% YoY, with net profit margin reaching 12.96%, up 2.83 percentage points YoY [3] - Gross margin improved to 31.81%, up 3.40 percentage points YoY, driven by product mix optimization, cost reduction, and exchange rate factors [3] - By product, gross margins were: industrial sewing machines (30.19%, +3.35 ppts YoY), cutting and spreading machines (42.40%, +3.76 ppts YoY), and automatic sewing equipment for shirts and jeans (37.89%, -1.26 ppts YoY) [3] Future Projections - Revenue forecasts for 2024-2026 are maintained at 6.843 billion yuan (+29% YoY), 9.064 billion yuan (+33% YoY), and 10.890 billion yuan (+20% YoY) respectively [6] - Net profit forecasts for 2024-2026 are maintained at 776 million yuan (+44% YoY), 1.057 billion yuan (+36% YoY), and 1.294 billion yuan (+22% YoY) respectively [6] - EPS forecasts for 2024-2026 are maintained at 1.60 yuan, 2.18 yuan, and 2.67 yuan respectively [6] Industry and Market Position - The company's industrial sewing machine market share is estimated at 32% based on production volume [4] - Domestic textile industry showed signs of recovery, with fixed asset investment in textile and apparel industry up 14% YoY in H1 2024 [4] - Overseas demand for industrial sewing machines showed strong recovery in May-June 2024, with export growth of +16% and +30% respectively [4] - The company's new product launches, including the "Fast Response King" and "616 Overlock King," have demonstrated strong market acceptance [5] Financial Ratios and Valuation - PE ratios for 2024-2026 are projected at 17x, 12x, and 10x respectively [6] - ROE is expected to increase from 12.4% in 2023 to 18.0% in 2026 [8] - Gross margin is projected to improve from 28.4% in 2023 to 31.0% in 2026 [8] - Current ratio is expected to improve from 1.04 in 2023 to 1.56 in 2026 [14]