Shanghai Jahwa(600315) 长江证券·2024-11-18 02:34Investment Rating - The report maintains a "Buy" rating for Shanghai Jahwa (600315 SH) [8] Core Views - Shanghai Jahwa's Q3 2024 performance was under pressure due to industry-wide slowdown and strategic adjustments, with revenue declining 20 93% YoY to 1 156 billion yuan and net profit turning negative [5][6] - The company is undergoing organizational, brand, and channel strategy reforms to improve efficiency and focus resources on key brands [7] - Despite short-term pressure, the report expects the reform effects to gradually materialize, with projected EPS of 0 33, 0 53, and 0 67 yuan for 2024-2026 [7] Financial Performance - Q3 2024 revenue breakdown: Personal care (including Six God and Maxam) 532 million yuan, Cosmetics (including Herborist and Dr Yu) 95 million yuan, Innovative categories (including Chinfie and GF) 151 million yuan, Overseas business (Tommee Tippee) 374 million yuan [6] - Gross margin narrowed by 3 24 percentage points to 54 49% in Q3 2024, mainly due to reduced cosmetics sales proportion [6] - Expense ratios increased: sales expenses rose 6 83 percentage points to 50 03%, management expenses up 0 17 percentage points to 11 4%, R&D expenses increased 0 57 percentage points to 3 07% [6] Strategic Reforms - Organizational restructuring: Adjusted domestic business structure into Personal Care, Cosmetics, and Innovation divisions to improve decision-making efficiency [7] - Brand strategy: Focused resources on first-tier brands (Six God and Dr Yu) to become category leaders, while developing second-tier brands (Herborist and Maxam) as value-for-money options [7] - Channel strategy: Online focus on interest e-commerce and content-driven operations, offline emphasis on retail channel expansion and efficiency improvement [7] Market Performance - Current stock price: 17 27 yuan (as of November 15, 2024) [8] - 12-month high/low: 23 88/13 67 yuan [8] - Recent performance: Shanghai Jahwa underperformed the CSI 300 Index and SSE Composite Index over the past 12 months [10]