JH Group(SH:603518) GF SECURITIES·2024-04-29 02:33Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 15.77 CNY per share, indicating an expected performance that exceeds the market by more than 15% over the next 12 months [4][14]. Core Insights - The company reported a significant revenue increase in 2023, achieving 4.545 billion CNY, a year-on-year growth of 16.55%, and a net profit of 298 million CNY, which represents a remarkable increase of 316.76% [3][14]. - The revenue breakdown by brand shows VGRASS with 963 million CNY (up 12.37%), Yun Jin with 50 million CNY (up 120.42%), and Teenie Weenie with 3.507 billion CNY (up 16.68%) [3]. - The company has improved its operational quality, with a stable gross margin of 69.20% and a significant reduction in operating expenses, leading to a net operating cash flow of 933 million CNY, up 69.99% year-on-year [3][14]. Summary by Sections Revenue and Profitability - In 2023, the company achieved a total revenue of 4.545 billion CNY, with a net profit of 298 million CNY, marking a 316.76% increase compared to the previous year [14]. - The earnings per share (EPS) for 2024, 2025, and 2026 are projected to be 1.05 CNY, 1.30 CNY, and 1.56 CNY respectively [3][16]. Brand and Channel Performance - The company’s direct store revenue reached 2.462 billion CNY (up 9.92%), while franchise store revenue was 320 million CNY (up 150.73%), and online revenue was 1.737 billion CNY (up 15.02%) [3]. - The number of VGRASS stores decreased by 10 to 197, while Teenie Weenie saw a reduction of 124 stores to 1,098 [3]. Financial Ratios and Valuation - The report indicates a stable gross margin of 69.20% and a significant decrease in the expense ratio by 8.32 percentage points to 59.76% [3]. - The company is expected to maintain a price-to-earnings (P/E) ratio of 15 times for 2024, leading to a reasonable valuation of 15.77 CNY per share [3][4].