JGJC(SZ:000799) Orient Securities·2025-05-04 09:27Investment Rating - The report maintains a "Buy" rating for the company with a target price of 45.89 CNY, based on a valuation of 149 billion CNY using the FCFF method [2][4][10]. Core Views - The company is experiencing weak sales performance, with a significant decline in revenue and net profit in 2024, attributed to a challenging consumption environment. The report anticipates a gradual recovery in 2025, contingent on macroeconomic factors [9][10]. - The company aims to optimize its product structure and deepen market operations, focusing on core markets and reducing inefficient SKUs by 50% [9][10]. Financial Forecasts - Revenue for 2024 is projected at 1.423 billion CNY, a decrease of 49.7% year-on-year, with a further decline expected in 2025 to 1.248 billion CNY [3][9]. - The net profit for 2024 is expected to be 0.1 billion CNY, down 97.7% year-on-year, with a recovery forecasted to 0.171 billion CNY in 2025 [3][9]. - The earnings per share (EPS) are projected to be 0.04 CNY in 2024, increasing to 0.53 CNY in 2025 and 0.62 CNY in 2026 [3][10]. Key Financial Metrics - The company reported a gross margin of 71.4% in 2024, down from 78.3% in 2023, and a net margin of 0.9%, a significant drop from 19.4% in the previous year [3][9]. - The total expenses ratio increased to 48.9% in 2024, reflecting a rise of 13.9 percentage points year-on-year, indicating higher operational costs [9][10]. - The company's cash flow remains robust, supporting its valuation despite the current challenges [10].