JGJC(SZ:000799) Huaan Securities·2024-11-03 07:30Investment Rating - The investment rating for the company is "Buy" (maintained) as of November 2, 2024 [1] Core Views - The company reported a significant decline in performance for Q3 2024, with total revenue of 197 million yuan, down 67.24% year-on-year, and a net profit attributable to shareholders of -65 million yuan, down 213.67% [1] - The company is facing challenges due to weakened industry demand and increased competition, leading to a decline in sales and profitability [1] - The company is implementing several strategies to improve its situation, including optimizing the product value chain, stabilizing product prices, and enhancing sales channels [1] Summary by Sections Financial Performance - For Q3 2024, total revenue was 197 million yuan, a decrease of 67.24% year-on-year, and the net profit attributable to shareholders was -65 million yuan, a decline of 213.67% [1] - For the first three quarters of 2024, total revenue was 1.191 billion yuan, down 44.41%, with a net profit of 56 million yuan, down 88.20% [1] Revenue and Profitability - The company’s revenue decline is attributed to weak industry demand and competitive pressures, with measures being taken to address these issues [1] - The gross margin for Q3 2024 decreased by 11.65 percentage points to 64.04%, primarily due to a decline in product mix [1] - The net profit margin for Q3 2024 fell by 42.22 percentage points to -32.77% [1] Future Outlook - The company expects a gradual recovery, with revenue projections for 2024-2026 adjusted to 1.466 billion yuan, 1.525 billion yuan, and 1.648 billion yuan, respectively, reflecting a year-on-year decline of 48.2% in 2024 but growth in subsequent years [1][2] - The net profit projections for the same period are 54 million yuan, 121 million yuan, and 182 million yuan, indicating a significant recovery in profitability by 2026 [2]