Jason Furniture (Hangzhou) (603816) Huafu Securities·2024-10-23 08:37Investment Rating - The report initiates coverage with a "Buy" rating for the company [4][24]. Core Views - The company has launched a new stock incentive plan aimed at core personnel, which is expected to enhance talent retention and align interests among shareholders, the company, and the core team [1][12]. - The company is focusing on a dual strategy of domestic and international trade, with a notable emphasis on integrating product categories and enhancing channel development [2][3]. - The report anticipates a recovery in the company's financial performance, with projected net profits for 2024-2026 showing a slight decline in 2024 followed by growth in subsequent years [4][19]. Summary by Sections Stock Incentive Plan and Management Changes - On September 23, the company announced a 2024 restricted stock incentive plan, granting 8.935 million shares at a price of 11.84 yuan per share, with performance targets set for net profit growth from 2025 to 2027 [1][12]. - The company appointed a new chairman, Kwang Guangxiong, who has a background in finance and management, which is expected to enhance collaboration with the controlling shareholder, Yingfeng Group [1][12]. Domestic Trade Strategy - In the first half of 2024, the company's domestic revenue decreased by 9.8% due to industry weakness and the divestment of Tianxi Home, but the underlying performance was better than the reported figures [2][19]. - The company is implementing a "one body, two wings" strategy, focusing on soft furniture innovation and integrated home solutions, with new marketing centers and distribution departments established to drive growth [2][15]. International Trade and Production Capacity - The company's international trade revenue increased by 12.6% in the first half of 2024, benefiting from improved operational efficiency in its overseas facilities, particularly in Vietnam and Mexico [3][19]. - The report highlights the successful launch of a mattress production facility in the U.S. and the establishment of marketing subsidiaries in various countries to enhance local market penetration [3][19]. Financial Forecast and Investment Recommendations - The company is projected to achieve net profits of 1.99 billion yuan in 2024, followed by 2.11 billion yuan in 2025 and 2.25 billion yuan in 2026, reflecting a compound annual growth rate of over 5% from 2025 to 2027 [4][19]. - The current price-to-earnings ratio for 2024 is estimated at 13 times, which is in line with comparable companies, indicating potential for valuation improvement as market conditions stabilize [4][24].