JGJC(SZ:000799) Guoxin Securities·2024-08-29 10:03Investment Rating - The investment rating for the company is "Neutral" [4][7]. Core Views - The company's revenue and net profit for Q2 2024 were in line with previous performance forecasts, with total revenue of 994 million yuan, down 35.5% year-on-year, and a net profit of 121 million yuan, down 71.3% year-on-year [6][7]. - The company is adjusting its product structure in response to pressure in the mid-to-high-end market, with significant declines in revenue for certain product lines, while lower-priced products are performing better [6][7]. - The company is focusing on optimizing its distribution channels and improving service efficiency, which has led to a significant reduction in the revenue decline compared to the previous quarter [6][7]. Summary by Sections Financial Performance - In H1 2024, the company achieved total revenue of 994 million yuan, down 35.5% year-on-year, and a net profit of 121 million yuan, down 71.3% year-on-year. Q2 2024 revenue was 500 million yuan, down 13.3% year-on-year, with a net profit of 48 million yuan, down 60.9% year-on-year [6][7]. - The revenue breakdown by product for H1 2024 shows significant declines for certain brands, with "Neican" and "Jiugui" down 60.85% and 30.11% respectively, while "Xiangquan" saw a 36.33% increase [6][7]. Market Dynamics - The company is experiencing weak demand in the business scene due to economic conditions, particularly affecting mid-to-high-end products. However, lower-priced products are seeing improved sales [6][7]. - The company has reduced the number of distributors to 1,301, optimizing the quality of its distribution network and enhancing management capabilities [6][7]. Profitability and Cost Management - The company's net profit margin was pressured by fixed costs, with tax and sales expenses increasing year-on-year. The net profit margin for Q2 2024 decreased by 15.2 percentage points [6][7]. - The company is committed to reforming its cost structure, focusing on consumer engagement and enhancing promotional activities [6][7]. Earnings Forecast - The company maintains its revenue and profit forecasts for 2024-2026, expecting revenues of 2.41 billion, 2.65 billion, and 3.04 billion yuan respectively, with corresponding net profits of 420 million, 480 million, and 570 million yuan [7].