Jason Furniture (Hangzhou) (603816) 华创证券·2024-11-10 13:20Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 42.62 CNY per share [1][3] Core Views - The company's profitability is under short-term pressure due to weak domestic demand, but foreign trade is expected to continue growing [1] - Management changes and equity incentives are expected to release long-term operational vitality [1] - The company is a leader in the soft furniture industry, with steady progress in both domestic and international expansion [1] Financial Performance - In Q3 2024, the company achieved revenue of 4.89 billion CNY, a YoY decrease of 6.9%, and net profit of 460 million CNY, a YoY decrease of 19.9% [1] - The gross margin in Q3 2024 was 29.8%, down 4.0 pcts YoY and 3.2 pcts QoQ [1] - The net profit margin in Q3 2024 was 9.5%, down 1.5 pcts YoY [1] Business Segments - Domestic business: Affected by weak domestic demand, the company is promoting an integrated home strategy and local "trade-in" policies to stimulate consumption [1] - Foreign trade: The company is steadily advancing offline and online retail businesses, with a strong presence on platforms like Amazon, Wayfair, Shopify, and Temu [1] Management and Incentives - New management team appointed, including Chairman Kuang Guangxiong and several vice presidents overseeing different business units [1] - Equity incentive plan launched in September 2024, targeting 84 core employees to boost long-term development confidence [1] Financial Forecasts - Revenue for 2024E/2025E/2026E is projected at 18.86/20.65/22.25 billion CNY, with YoY growth rates of -1.8%/9.5%/7.7% [2] - Net profit for 2024E/2025E/2026E is forecasted at 1.87/2.06/2.24 billion CNY, with YoY growth rates of -6.7%/10.1%/8.6% [2] - EPS for 2024E/2025E/2026E is estimated at 2.28/2.51/2.72 CNY [2] Valuation - The company's PE ratio for 2024E/2025E/2026E is 15/13/12X [2] - The target price of 42.62 CNY per share is based on a 17X PE ratio for 2025E [1]