Jason Furniture (Hangzhou) (SH:603816) Huachuang Securities·2024-08-23 10:11Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 37.8 CNY per share, compared to the current price of 25.00 CNY [2]. Core Views - The company reported a slight increase in revenue of 0.3% year-on-year for the first half of 2024, but a decline in net profit by 3.0% and a decrease in net profit after deducting non-recurring items by 6.8% [2]. - The domestic market faced short-term pressure, but the company is advancing its "One Body, Two Wings" strategy, which includes enhancing supply chain efficiency and product cost reduction [2]. - The foreign trade business continued to grow, with a revenue increase of 12.6% year-on-year, supported by partnerships with major retail clients and expansion into online platforms in the U.S. [2]. Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of 89.1 billion CNY, with a net profit of 9.0 billion CNY and a net profit after deducting non-recurring items of 7.8 billion CNY [2]. - For Q2 2024, revenue was 45.6 billion CNY, with net profit at 4.8 billion CNY and net profit after deducting non-recurring items at 4.1 billion CNY, reflecting a year-on-year decline of 7.4%, 9.1%, and 18.4% respectively [2]. Domestic Market - The domestic business generated 47.2 billion CNY in revenue, down 9.8% year-on-year, but the gross margin improved by 1.3 percentage points to 37.8% [2]. - The company implemented a strategy of high-end products and cost reduction, leading to improved gross margins across various product categories [2]. Foreign Market - The foreign trade segment reported revenue of 38.9 billion CNY, up 12.6% year-on-year, with a gross margin of 26.0%, an increase of 2.9 percentage points [2]. - The company is actively exploring brand expansion overseas, establishing flagship stores in countries like India, Vietnam, and Uzbekistan [2]. Profitability and Cost Management - The overall gross margin for H1 2024 was 33.0%, an increase of 1.5 percentage points year-on-year, driven by cost reduction and efficiency improvements [2]. - The company’s net profit margin for H1 2024 was 10.1%, a slight decrease of 0.3 percentage points year-on-year [2]. Future Outlook - The report forecasts profits of 20.71 billion CNY, 22.59 billion CNY, and 24.57 billion CNY for 2024, 2025, and 2026 respectively, with corresponding price-to-earnings ratios of 10, 9, and 8 times [2]. - The target price of 37.8 CNY per share corresponds to a 2024 price-to-earnings ratio of 15 times, indicating a favorable valuation compared to peers [2].