JH Group(SH:603518) KAIYUAN SECURITIES·2024-04-28 08:30Investment Rating - The investment rating for the company is "Buy" (maintained) [11][15]. Core Views - The company is expected to outperform the market by over 20% [11]. - The report highlights a steady development outlook due to ongoing channel adjustments [14][17]. Financial Performance Summary - In 2023, the company achieved revenue of 4.545 billion yuan, a year-on-year increase of 16.6%, and a net profit attributable to shareholders of 298 million yuan, a year-on-year increase of 316.8% [17]. - For Q1 2024, revenue was 1.153 billion yuan, a slight decrease of 1.2% year-on-year, while net profit attributable to shareholders increased by 13.2% to 116 million yuan [17]. - The gross profit margin for 2023 was 69.2%, remaining stable, with a net profit margin of 6.5%, an increase of 4.7 percentage points year-on-year [6][30]. - The company’s operating cash flow for 2023 was 933 million yuan, a year-on-year increase of 70% [6]. Brand Performance - VGRASS reported revenue of 960 million yuan in 2023, with a year-on-year growth of 12.4%, while TW achieved 3.51 billion yuan, growing by 16.7% [5]. - The company has been closing underperforming stores, with a net closure of 10 stores for VGRASS and 124 for TW in 2023 [5]. Future Projections - The forecast for net profit attributable to shareholders for 2024-2026 is 366 million yuan, 434 million yuan, and 502 million yuan respectively, with corresponding EPS of 1.05, 1.25, and 1.45 yuan [17][30]. - The current price-to-earnings ratio (P/E) is projected to be 9.6 for 2024, 8.1 for 2025, and 7.0 for 2026, indicating a favorable valuation [30].