Shanghai Jahwa(600315) SINOLINK SECURITIES·2024-10-29 07:00Investment Rating - The report downgrades the investment rating of Shanghai Jahwa to "Accumulate" [2][4] Core Views - The company is undergoing a reform period, which has led to a temporary decline in performance, but it is focusing on brand building for long-term development [2][4] - The revenue for the first three quarters of 2024 is reported at 4.477 billion RMB, a year-on-year decrease of 12.07%, with a net profit attributable to shareholders of 163 million RMB, down 58.72% year-on-year [2][3] - The company is actively adjusting its strategy, transitioning from distributors to self-operated channels and reducing inventory in department stores, which has impacted performance [3][4] Summary by Sections Performance Overview - For Q3 2024, revenue was 1.156 billion RMB, a year-on-year decline of 20.93%, with a net loss attributable to shareholders of 75.3 million RMB [2][3] - The operating cash flow increased by 28.6% year-on-year, indicating improved cash management despite declining revenues [2] Strategic Adjustments - The company is enhancing its online operations and focusing on brand building, with notable growth in e-commerce sales for its brands [3][4] - Marketing activities are intensifying, with expectations for a positive performance during the Double Eleven shopping festival [4] Financial Forecasts - The profit forecasts for 2024-2026 are adjusted to 270 million RMB, 360 million RMB, and 470 million RMB respectively, reflecting a significant decline in 2024 but expected recovery in subsequent years [4][6] - The report anticipates a gradual improvement in performance as the reforms take effect, with projected P/E ratios of 44, 33, and 25 for 2024-2026 [4][6]