JH Group(SH:603518) EBSCN·2024-04-28 03:02Investment Rating - The report upgrades the investment rating to "Buy" with a target price of 10.11 CNY [12][20]. Core Insights - The company, Jin Hong Group, reported a significant performance increase in 2023, with revenue reaching 4.545 billion CNY, a year-on-year growth of 16.55%, and a net profit of 298 million CNY, up 316.76% [6][17]. - The first quarter of 2024 showed a slight revenue decline of 1.24% year-on-year, but net profit increased by 13.19% [12][20]. - The company is focusing on optimizing its channel structure and enhancing product development capabilities to achieve high-quality growth in 2024 [14][20]. Financial Performance Summary - In 2023, the company achieved a gross margin of 69.20%, maintaining stability compared to the previous year [21]. - The net profit margin improved to 6.55%, an increase of 4.72 percentage points year-on-year [12][21]. - The company plans to continue its transformation in offline channels, optimizing the structure between direct and franchise stores, and closing underperforming outlets [14][20]. Revenue and Profit Forecast - The revenue forecast for 2024 is set at 5.085 billion CNY, with a projected growth rate of 11.87% [21]. - The net profit for 2024 is expected to reach 363 million CNY, reflecting a growth rate of 21.80% [21]. - Earnings per share (EPS) are projected to be 1.04 CNY for 2024, with a price-to-earnings (P/E) ratio of 10 [21]. Market Position and Strategy - The company is enhancing its core product competitiveness and expects improved profitability as the proportion of franchise stores increases [20]. - Jin Hong Group is leveraging new retail strategies, particularly through platforms like Douyin (TikTok) and Xiaohongshu, to boost online sales [19][14]. - The company aims to strengthen its supply chain and product development processes to enhance operational efficiency [14][20].