JACK(SH:603337) SINOLINK SECURITIES·2024-08-22 04:30Investment Rating - The report assigns a "Buy" rating to the company with a target price of 32.59 CNY per share, based on a 20X valuation for 2024 [3][4]. Core Views - The company has grown into a global leader in the industrial sewing machine industry over thirty years, surpassing Japanese competitors in revenue by 2020 and holding approximately 32% of the domestic market share in 2023 [2][10]. - The industry is expected to enter an upward cycle, benefiting from a recovery in both domestic and international sales, with significant growth in the first half of 2024 [2][3]. - The company is actively pursuing smart complete solutions, which could represent a new growth curve, enhancing its competitive edge in the market [2][3]. Summary by Sections Company Overview - The company has established itself as a global leader in the industrial sewing machine sector, with a significant market share in China and a history of overcoming industry challenges [2][10]. Industry Outlook - The industrial sewing machine industry operates on a 2-3 year cycle, with the current phase indicating a recovery driven by demand for equipment upgrades in the downstream textile and apparel sectors [2][3]. - In the first half of 2024, domestic sales of industrial sewing machines increased by approximately 20%, with some companies reporting growth exceeding 50% [2][3]. Growth Prospects - The company is focusing on smart complete solutions, integrating various technologies to provide comprehensive services from fabric cutting to final product sorting, which is expected to attract larger clients and drive future growth [2][3]. Financial Forecast - The company is projected to achieve net profits of 789 million CNY, 997 million CNY, and 1.219 billion CNY for the years 2024, 2025, and 2026, respectively, with corresponding P/E ratios decreasing from 15X in 2024 to 10X in 2026 [3][5].