Joyoung(SZ:002242) Guotou Securities·2025-09-01 07:37Investment Rating - The investment rating for Joyoung Co., Ltd. is maintained at "Buy-A" with a 12-month target price of 11.73 CNY [3][4]. Core Views - Joyoung's revenue for the first half of 2025 was 3.99 billion CNY, a year-on-year decrease of 9.1%, with a net profit attributable to shareholders of 120 million CNY, down 30.0% year-on-year. The second quarter alone saw revenue of 1.99 billion CNY, down 14.4% year-on-year, and a net profit of 20 million CNY, down 53.2% year-on-year. The decline in external sales is attributed to adjustments in related party transactions, but there is optimism for recovery in domestic sales due to government subsidies stimulating small appliance consumption [1][2]. Summary by Sections Financial Performance - In H1 2025, domestic sales revenue increased by 0.2% year-on-year, while external sales revenue decreased by 48.7% year-on-year. The second quarter's external sales are expected to have declined further [1]. - The gross margin for Q2 was 28.1%, an increase of 0.9 percentage points year-on-year, primarily due to a higher proportion of domestic sales [2]. - The net profit margin for Q2 was 1.1%, a decrease of 0.9 percentage points year-on-year, influenced by fluctuations in non-core business and a decline in revenue scale [2]. Future Outlook - The company is expected to show significant operational elasticity as government subsidies continue to boost domestic small appliance consumption and as export business stabilizes. EPS forecasts for 2025, 2026, and 2027 are 0.29 CNY, 0.42 CNY, and 0.50 CNY, respectively [3][4]. Valuation Metrics - The projected P/E ratios for 2025, 2026, and 2027 are 35.1, 24.1, and 20.1, respectively, indicating a potential recovery in profitability [7][9].