JONHON(SZ:002179) Changjiang Securities·2024-05-06 07:32Investment Rating - The investment rating for the company is "Buy" and is maintained [5]. Core Views - The company's revenue has experienced a short-term decline due to industry demand fluctuations, but internal cost control measures have led to a significant improvement in performance for Q1 2024 [6]. - The overall operational quality of the company has improved significantly, with short-term borrowing reaching a new low since 2016, and inventory levels increasing compared to the beginning of the period to ensure product delivery [6]. - The company is committed to expanding production, reinforcing the certainty of long-term growth [6]. Summary by Sections Financial Performance - In Q1 2024, the company achieved revenue of 4.013 billion yuan, a year-on-year decrease of 24.87%, and a net profit attributable to shareholders of 751 million yuan, down 24.41% year-on-year [5][6]. - Despite the revenue decline, the gross margin improved to 35.55%, and the net profit margin significantly increased to 19.79% [6]. Cost Management - The company has effectively managed costs, with sales expenses decreasing by 42.03% to 73 million yuan and management expenses down by 46.87% to 186 million yuan [6]. - The quality of inventory and accounts receivable management has improved, leading to a reduction in credit and asset impairment losses [6]. Inventory and Capacity Expansion - The inventory balance at the end of Q1 2024 increased to 4.481 billion yuan, ensuring the release of short-term demand [6]. - The balance of construction in progress rose to 2.034 billion yuan, indicating strong confidence in long-term development through significant capacity expansion [6]. Profit Forecast and Valuation - The company is expected to achieve net profits attributable to shareholders of 4.16 billion, 5.25 billion, and 6.63 billion yuan for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 25%, 26%, and 26% [6]. - Corresponding price-to-earnings ratios for these years are projected to be 17, 14, and 11 times [6].