JACK(SH:603337) Guotou Securities·2024-08-14 09:00Investment Rating - The investment rating for the company is "Buy-A" with a target price of 33.2 CNY, maintaining the rating based on continuous improvement in revenue and profitability in the first half of 2024 [5][7]. Core Insights - The company reported a significant increase in revenue and net profit for Q2 2024, with revenue reaching 1.606 billion CNY, a year-on-year growth of 29.15%, and net profit of 229 million CNY, up 44.38% year-on-year [1][2]. - The introduction of the core product "Fast Response King" has positively impacted sales, contributing to an increase in average prices and gross margins [2]. - The domestic market was the primary driver of growth in the first half of 2024, with domestic revenue of 1.773 billion CNY, a 43.38% increase year-on-year, while overseas revenue showed modest growth of 0.89% [3]. - The launch of the new overlock sewing machine "Overlock King" is expected to enhance sales further, aligning with the industry's demand for quick response and small orders [4]. Summary by Sections Financial Performance - In Q2 2024, the gross margin was 33.59%, an increase of 3.53 percentage points from Q1, while the gross margin for industrial sewing machines in the first half was 30.19%, up 3.35 percentage points year-on-year [1]. - The company forecasts revenues of 6.96 billion CNY, 8.58 billion CNY, and 10.13 billion CNY for 2024, 2025, and 2026 respectively, with net profits projected at 800 million CNY, 1.02 billion CNY, and 1.28 billion CNY for the same years [5][7]. Market Analysis - The domestic market's growth is attributed to improvements in product quality, marketing, and management, which have enhanced the company's market share [3]. - The overseas market is expected to recover gradually in the second half of 2024, providing new growth momentum for the company [3]. Product Development - The "Overlock King" machine features advanced technologies aimed at meeting current industry demands, which is anticipated to drive sales during the peak season in the garment processing industry [4].