JACK(SH:603337) HTSC·2025-06-06 01:44Investment Rating - The investment rating for the company is "Buy" with a target price of 43.60 RMB [8][9]. Core Views - The report indicates that the impact of tariffs on the sewing machine industry is manageable in the short term, while in the medium to long term, it may drive a shift in global apparel manufacturing, boosting demand for new sewing machines [1][2]. - The company is focusing on promoting AI technology in apparel manufacturing, introducing new products such as AI sewing machines and humanoid robots to help downstream clients reduce costs and improve efficiency [1][4]. - Continuous product innovation is expected to enhance the company's profitability [1]. Summary by Sections Tariff Impact - In the short term, uncertainty in U.S. tariff policies may lead some downstream clients to adopt a wait-and-see approach regarding expansion. However, in the medium to long term, this uncertainty is likely to accelerate the decentralization of the global apparel supply chain, prompting manufacturers to shift to countries with lower tariff risks, thereby increasing demand for new machines and providing opportunities for leading companies to enhance market share [2]. Industry Growth - In April, the industrial sewing machine export value reached 148 million USD, reflecting a year-on-year increase of 23%. Notably, demand from external markets like Vietnam and Bangladesh grew by 32% and 50% respectively, although this was a slowdown compared to Q1 [3]. - Countries with lower tariff risks, such as Egypt, Kenya, and Argentina, showed remarkable demand growth, with year-on-year increases of 111%, 254%, and 842% respectively [3]. AI and Robotics in Manufacturing - The apparel manufacturing industry is labor-intensive, with significant potential for AI and humanoid robot applications. Over the past eight years, approximately 57 million industrial sewing machines have been used in China, indicating a global sewing machine population of nearly 60 million. This suggests a substantial opportunity for machine replacement [4]. - The company has made significant progress in developing high-end products, including prototypes of AI sewing machines and humanoid robots, which are expected to open new growth avenues [4]. Profit Forecast and Valuation - The company maintains its profit forecast, expecting net profits of 1.16 billion, 1.28 billion, and 1.38 billion RMB for 2025 to 2027, corresponding to PE ratios of 16, 14, and 13 times respectively. The target price has been adjusted to 43.6 RMB, reflecting an increase from the previous 38.4 RMB due to a rise in comparable company PE ratios [5].