JGJC(SZ:000799) Guotai Junan Securities·2024-04-30 14:32Investment Rating - The report downgrades the investment rating to "Cautious Buy" and lowers the target price to 55.30 yuan from the previous 89.90 yuan [1][6][7]. Core Views - The company is undergoing a deep adjustment phase, with a significant decline in revenue of 43.2% in 2023, which was below initial expectations. The report indicates that the company is focusing on transforming its cost structure and reshaping its channel system, which has led to increased sales and management expense ratios, negatively impacting profitability [1][6][7]. - For Q1 2024, the company continues to face challenges, with revenue and profit declining by 48.8% and 75.56% respectively, primarily due to external demand pressures and the need to push for product iterations and inventory reduction [6][7]. - The report suggests that despite short-term performance impacts from channel reforms and product iterations, these initiatives are expected to strengthen the company's channel foundation and consumer confidence, leading to potential value recovery as the industry cycle turns upward [7]. Summary by Sections Investment Rating - Current Rating: Cautious Buy [1] - Previous Rating: Buy [1] - Target Price: 55.30 yuan [1][6] - Previous Target Price: 89.90 yuan [1][6] Financial Performance - 2023 Annual Revenue: 2,830 million yuan, down 43.2% year-on-year [2][6]. - Q1 2024 Revenue: 4.94 million yuan, down 48.8% year-on-year [6]. - 2023 Net Profit: 548 million yuan, down 48% year-on-year [2][6]. - 2024 EPS Forecasts: 1.42 yuan, 1.86 yuan, and 2.41 yuan for 2024, 2025, and 2026 respectively [1][6]. Market Position and Strategy - The company is recognized as a leader in the Chinese liquor industry, focusing on the production and sale of various liquor products [2][6]. - The report emphasizes the importance of channel reform and product iteration as strategic moves to enhance market competitiveness and consumer trust [7]. Valuation Metrics - The report applies a forward P/E ratio of 23X based on the average valuation of the liquor sector for 2024, reflecting the company's expected recovery in performance [1][6].