JINHUI(SH:603919) Guoxin Securities·2024-08-21 13:01Investment Rating - The investment rating for the company is "Outperform the Market" [2][4][5] Core Views - In Q2 2024, the company's revenue grew by 7.7% year-on-year, while net profit increased by 1.9%. For the first half of 2024, total revenue reached 1.754 billion yuan, up 15.2% year-on-year, and net profit attributable to shareholders was 295 million yuan, up 16.0% year-on-year [4][5] - The product mix has shifted downwards in Q2 2024, but the gross margin remains stable. Revenue from products priced above 300 yuan, between 100-300 yuan, and below 100 yuan grew by 7.1%, 2.7%, and 13.3% year-on-year, respectively. The main contributors to growth were the Jin Hui Sanxing and Sijia products [4][5] - The company experienced a decrease in promotional activities, leading to improved cost conditions and some price increases contributing to a gross margin increase of 2.63 percentage points year-on-year [4][5] - The company has seen a 9.3% year-on-year increase in contract liabilities, indicating a stable basic market presence in the domestic market despite weaker demand in the off-season [5][6] Summary by Sections Financial Performance - In Q2 2024, the company achieved total revenue of 678 million yuan, a 7.7% increase year-on-year, and a net profit of 74 million yuan, a 1.9% increase year-on-year [4][5] - For the first half of 2024, total revenue was 1.754 billion yuan, up 15.2% year-on-year, and net profit was 295 million yuan, up 16.0% year-on-year [4][5] - The company’s gross margin improved due to reduced promotional activities and price increases, with a year-on-year increase of 2.63 percentage points [4][5] Sales and Market Dynamics - The company’s sales in Q2 2024 were affected by weaker demand typical of the off-season, with a 12.8% year-on-year decrease in cash sales [5][6] - The number of distributors increased by 130 in Q2, indicating an expansion of the sales team and a focus on enhancing market presence [4][5] - The company plans to continue its share repurchase program, having spent 181 million yuan by the end of July 2024 [5][6] Future Outlook - The company is expected to achieve its annual revenue target with a projected revenue of 3.005 billion yuan for 2024, reflecting a year-on-year growth of 17.9% [5][6] - The forecast for net profit in 2024 is 392 million yuan, representing a year-on-year increase of 19.3% [5][6] - The current stock price corresponds to a P/E ratio of 23.2 for 2024, maintaining the "Outperform the Market" rating [5][6]