Jasan Group(SH:603558) Guoxin Securities·2024-03-17 16:00Investment Rating - The investment rating for the company is "Buy" [1][8]. Core Views - The company achieved a positive net profit growth of 2% to 270 million yuan in 2023 despite a 3% decline in revenue to 2.28 billion yuan, driven by strong performance in cotton socks [1]. - The company is a leading manufacturer of cotton socks and has expanded into seamless apparel since 2017, with cotton socks revenue growing by 3% to 1.59 billion yuan, while seamless apparel revenue decreased by 15% to 630 million yuan [1]. - The fourth quarter of 2023 saw a significant recovery with a revenue increase of 16% and a net profit turnaround to 70 million yuan [1]. - The company plans to invest 550 million yuan in expanding production capacity in Vietnam, which is expected to generate annual revenue of 1.07 billion yuan and a net profit of 150 million yuan once fully operational [1]. Summary by Sections Financial Performance - In 2023, the company's gross margin was 26.0%, slightly up year-on-year, with cotton socks gross margin improving and seamless apparel gross margin declining by 2.7 percentage points [1]. - The company maintained stable sales and management expense ratios, with a decrease in foreign exchange gains impacting the ratio by 0.6 percentage points and a reduction in asset impairment ratio by 0.3 percentage points [1]. - The company reported a dividend payout ratio of approximately 39% for the year, with total cash dividends and share buybacks amounting to about 106 million yuan [1]. Future Outlook - The company anticipates a clear recovery trend in its fundamentals for 2024, supported by improving order volumes from overseas brands [1]. - The upward revision of profit forecasts for 2024-2026 projects net profits of 310 million, 360 million, and 410 million yuan, representing year-on-year growth rates of 16.2%, 15.6%, and 13.9% respectively [1]. - The target price has been adjusted to 11.9-12.8 yuan, corresponding to a 14-15x PE for 2024 [1].