JH Group(SH:603518) ZHESHANG SECURITIES·2025-11-04 10:56Investment Rating - The investment rating for the company is "Buy" (maintained) [7] Core Views - The company reported a slight decline in revenue and a significant drop in net profit for Q3 2025, but the long-term growth trend remains positive due to improved store efficiency and growth in IP licensing and cloud brocade [1][5] - The new flagship stores have shown significant sales improvements, and the IP licensing business has seen a substantial increase in revenue, indicating a potential new growth engine for the company [3][5] Summary by Sections Financial Performance - In Q3 2025, the company achieved revenue of 840 million yuan, a year-on-year decrease of 0.6%, with a net profit of 394,000 yuan, down 97.2% year-on-year. For the first three quarters, revenue was 2.83 billion yuan, down 3.0% year-on-year [1] - The gross margin for Q3 2025 was 67.8%, a decrease of 1.1 percentage points, while the net profit margin was 0.05%, down 1.6 percentage points [4] Brand Performance - Teenie Weenie's revenue for the first three quarters was 2.22 billion yuan, down 2.3% year-on-year, but showed a 1.4% increase in Q3 alone. The average monthly sales for new and existing stores increased significantly [2] - VGRASS reported a revenue of 490 million yuan, down 12.7% year-on-year, with a notable increase in sales for new stores but a decline for existing ones [2] Growth Drivers - Cloud brocade revenue grew by 32.1% year-on-year to 79.01 million yuan, supported by the rise of Eastern aesthetics and improved product development [3] - The IP licensing business for Teenie Weenie saw a remarkable growth of 71.6% year-on-year, with a focus on home textiles and apparel, indicating a high-profit potential [3] Future Outlook - Revenue projections for 2025-2027 are 4.4 billion, 4.64 billion, and 4.89 billion yuan, respectively, with expected net profits of 270 million, 323 million, and 357 million yuan [5][12] - The company is expected to maintain a PE ratio of 12, 10, and 9 times for the years 2025, 2026, and 2027, respectively, reflecting a positive outlook on profitability [5]