M&G(603899) Guoxin Securities·2024-11-07 00:43Investment Rating - The investment rating for the company is "Outperform the Market" [1][3][12] Core Views - The company reported steady revenue growth in Q3 2024, with a total revenue of 60.6 billion (+2.8% YoY) and a net profit of 3.9 billion (-20.6% YoY) [1] - The decline in profitability is attributed to structural changes in business and product categories, alongside weak external demand and reduced customer traffic [1] - The traditional core business saw a revenue of 68.4 billion (+4.4% YoY) in the first three quarters of 2024, while online sales surged with a revenue of 8.8 billion (+34.2% YoY) [1] - The company is optimistic about the recovery of its office direct sales and retail stores as procurement normalizes and bidding processes resume [1] Financial Performance Summary - For Q1-Q3 2024, the company achieved a total revenue of 171.1 billion (+7.9% YoY) and a net profit of 10.2 billion (-6.6% YoY) [1] - The gross profit margin for Q3 2024 was 20.5%, down 1.4 percentage points YoY, primarily due to an increase in low-margin product sales [1] - The company expects net profits for 2024-2026 to be 15.3 billion, 17.3 billion, and 19.2 billion respectively, with a diluted EPS of 1.7, 1.9, and 2.1 [1][2] Market Position and Strategy - The company has expanded its retail presence, with a total of 740 retail stores nationwide, including 702 stores under the "Ji Mu" brand, which saw a net increase of 84 stores since the beginning of the year [1] - The company aims to optimize its product mix and enhance store operations to strengthen the "Ji Mu" brand as a key element of its product upgrade strategy [1] - The current stock price corresponds to a PE ratio of 18.5, 16.4, and 14.8 for the years 2024, 2025, and 2026 respectively [2][3]