JACK(SH:603337) Changjiang Securities·2025-05-07 04:50Investment Rating - The investment rating for the company is "Buy" [12] Core Viewpoints - Jack Co., Ltd. is a global leader in industrial sewing machines, benefiting from trends such as small batch quick response and efficiency improvements in sewing equipment, which drive equipment upgrades and replacements domestically. Internationally, the company benefits from equipment upgrades abroad and the shift of global garment manufacturing to emerging economies, enhancing China's share in the global sewing equipment market [4][10] - The company has established a leading position in technology through its popular products and is expected to lead the development of sewing robots as it undertakes key national projects [10][20] - The sewing machinery industry is characterized by significant cyclicality, with equipment upgrades and new technology trends being key drivers for replacement. The industry is currently experiencing a new upward cycle driven by the "small batch quick response" trend in garment production [7][54] Summary by Relevant Sections Company Overview - Jack Co., Ltd. is the largest global enterprise in the sewing equipment industry, with a market share of approximately 31% in industrial sewing machines as of 2023. The company provides a complete solution for garment intelligent manufacturing, covering the entire process from material storage to final product warehousing [20][22] Industry Trends - The global garment manufacturing focus is shifting towards emerging economies, with China and Japan being significant suppliers of sewing equipment. The demand for Chinese sewing equipment is expected to grow as the country enhances its smart manufacturing capabilities [8][10] - The industry is witnessing a transition from traditional equipment to high-efficiency, intelligent devices to improve production efficiency and reduce labor costs, driven by the increasing demand for quick response production models [62] Financial Performance - The company's revenue has shown overall growth over the past decade, with significant fluctuations due to industry cycles. In 2021, revenue reached 6.054 billion, a year-on-year increase of 71.91%. However, in 2022, revenue decreased to 5.502 billion, a decline of 9.12% due to external economic pressures [26][34] - For 2024, the company is projected to achieve revenue of 6.094 billion, a year-on-year increase of 15.11%, driven by the recovery of domestic and international industry cycles and the success of its "explosive product strategy" [26][34] Product and Profitability - Industrial sewing machines account for over 80% of the company's revenue, with a gross margin of 31.28% in 2024, reflecting an increase due to the introduction of high-margin products [32][38] - The company has been increasing its R&D investment, with R&D expense ratios rising from 7.1% in 2022 to 8.0% in 2024, indicating a commitment to innovation and technology leadership [34][41]