JH Group(SH:603518) KAIYUAN SECURITIES·2024-08-20 09:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report emphasizes the ongoing channel adjustments and expresses optimism for steady development under future channel upgrades [1][3] - The company achieved revenue of 2.078 billion yuan in H1 2024, a year-on-year decrease of 1.6%, while net profit attributable to shareholders increased by 3.1% to 148 million yuan [3][4] - Due to store closures earlier in the year, short-term revenue is under pressure, leading to a downward revision of profit forecasts for 2024-2026 [3][4] Financial Performance Summary - In H1 2024, the company reported a revenue of 2.078 billion yuan, with a net profit of 148 million yuan, reflecting a 3.1% increase year-on-year [3] - The revenue for Q2 2024 was 925 million yuan, down 2.0% year-on-year, with a net profit of 32 million yuan, down 22.4% [3] - The company expects net profits of 343 million yuan, 392 million yuan, and 447 million yuan for 2024, 2025, and 2026 respectively, with corresponding EPS of 0.99, 1.13, and 1.29 yuan [3][5] Brand Performance - VGRASS reported revenues of 400 million yuan in H1 2024, down 12.6% year-on-year, while TW achieved revenues of 1.62 billion yuan, a slight decrease of 0.2% [4] - The company is focusing on channel structure adjustments, with a net closure of 13 stores for VGRASS and 23 for TW by the end of H1 2024 [4] - Cloud brocade (云锦) continues to show strong growth, with revenues of 40 million yuan in H1 2024, up 115.1% year-on-year [4] Profitability and Operational Efficiency - The gross margin for H1 2024 was 69.42%, with a net profit margin of 7.1%, reflecting a year-on-year increase of 0.3 percentage points [4] - Inventory turnover days improved to 249 days, a decrease of 34 days year-on-year, indicating better operational efficiency [4] - The company’s financial expenses decreased, contributing to a steady improvement in profitability [4]