Joyoung(002242) 高盛·2024-08-09 10:42Investment Rating - The investment rating for Joyoung Co. (002242.SZ) is "Sell" with a 12-month price target of RMB 9.4, indicating a downside potential of 9.6% from the current price of RMB 10.4 [5][6]. Core Views - The report suggests that the current valuation of Joyoung Co. does not adequately reflect several downside risks, including weak domestic demand for small appliances, intensified competition affecting profit margins, and slowing growth in overseas revenue [5][6]. - The revenue forecasts for 2024-2026 have been slightly adjusted downwards by 1-2% to reflect the latest industry trends, with expected revenues of RMB 9.6 billion in 2024, RMB 10.2 billion in 2025, and RMB 10.9 billion in 2026 [2][3][6]. Financial Summary - Revenue for 2024 is projected at RMB 9,629 million, with a year-on-year growth of 0.2%. For 2025 and 2026, revenues are expected to be RMB 10,230 million and RMB 10,873 million, respectively, reflecting growth rates of 6.2% and 6.3% [2][3]. - The gross profit margin (GPM) is expected to be 26.9% in 2024, with slight improvements to 27.1% in 2025 and 27.3% in 2026 [2][3]. - Net income is forecasted to be RMB 449 million in 2024, RMB 493 million in 2025, and RMB 549 million in 2026, with year-on-year growth rates of 15.5%, 9.7%, and 11.4% respectively [2][3]. - Earnings per share (EPS) are projected to be RMB 0.59 in 2024, RMB 0.64 in 2025, and RMB 0.72 in 2026, with slight adjustments from previous estimates [2][3][6]. Key Assumptions - The report highlights that the small appliance market remains vulnerable to consumer spending trends, with potential risks of consumption downgrade due to the discretionary nature of these products [5]. - The competitive landscape in the domestic market is expected to intensify, which may further pressure profit margins [5].