JGJC(SZ:000799) SINOLINK SECURITIES·2025-04-29 01:54Investment Rating - The report maintains a "Buy" rating for the company, with expected earnings per share (EPS) of 0.30, 0.45, and 0.605 for the years 2025, 2026, and 2027 respectively, corresponding to price-to-earnings (PE) ratios of 147, 96, and 72 [5] Core Views - The company reported a significant decline in revenue and net profit for 2024, with revenue at 1.42 billion RMB, down 49.7% year-on-year, and net profit at 0.1 billion RMB, down 97.7% year-on-year. The first quarter of 2025 also showed a decline in revenue to 0.34 billion RMB, down 30.3% year-on-year, and net profit at 0.3 billion RMB, down 56.8% year-on-year, indicating continued pressure on performance [2][5] - The company is focusing on inventory reduction and restructuring its product lineup, implementing a "2+2+2" strategy to streamline its offerings. This includes reducing the number of SKUs for its flagship products [3] - The report highlights a shift in sales channels, with online sales down 34% and offline sales down 51% in 2024. The company is managing its customer base through classification and strict entry standards, while also expanding its core terminal stores [4] Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 1.42 billion RMB, with a gross profit margin of 71.4%, down 7.0 percentage points year-on-year. The net profit margin was 0.9%, down 18.5 percentage points year-on-year. For Q1 2025, the gross profit margin was 70.7% [4][10] - The company expects revenues to decline by 3.0% in 2025, followed by growth of 3.0% and 7.2% in 2026 and 2027 respectively. Net profits are projected to recover to 1.0 billion RMB in 2025, 1.5 billion RMB in 2026, and 2.0 billion RMB in 2027 [5][10] Market Dynamics - The report notes that the overall demand in the liquor industry is weakening, which poses a significant challenge to smaller enterprises. The company is adjusting its profit forecasts downward for 2025 and 2026 by 35% and 31% respectively [5] - The company is also focusing on enhancing its marketing strategies and addressing inventory issues, with a notable increase in consumer engagement through events and promotions [3][4]