JGJC(SZ:000799) Guotai Junan Securities·2024-09-01 01:38Investment Rating - The report maintains a "Cautious Accumulate" rating and lowers the target price to 41.49 yuan from the previous 53.94 yuan [3][5][13]. Core Views - The company continues to experience adjustments, with a revenue decline that is narrowing. The second quarter of 2024 saw a revenue decline of 13.27% year-on-year, which is slightly better than expected. The company is focusing on transforming its growth model, particularly in small regions with high market share, which is expected to stabilize its foundation for future growth [2][3][13]. - The report has revised down the earnings forecasts for 2024-2026, with expected EPS of 0.75 yuan, 0.85 yuan, and 1.01 yuan respectively. This adjustment reflects the significant downward pressure on profitability during the adjustment phase [3][13]. Financial Summary - For 2024, the company is projected to have a revenue of 2.325 billion yuan, a decrease of 17.8% from the previous year. The net profit attributable to the parent company is expected to be 244 million yuan, down 55.4% year-on-year. The EPS for 2024 is forecasted at 0.75 yuan, with a net profit margin of 5.4% [4][12][13]. - The financial performance shows a significant drop in net profit and EPS, with the net profit margin declining to historical lows. The net profit for the first half of 2024 was 48 million yuan, down 60.87% year-on-year [14][13]. Market Position and Strategy - The company is undergoing a channel model transformation, focusing on terminal and channel support, which has impacted gross sales margins. The gross sales margin decreased by 7.9 percentage points year-on-year in Q2 2024 [3][13]. - The report emphasizes the need for the company to avoid repeating past mistakes and to focus on improving its channel system and brand building. If successful, the company could enter a new phase of expansion as consumer demand recovers [3][13].