Jasan Group(SH:603558) Changjiang Securities·2024-05-14 03:02Investment Rating - The investment rating for the company is "Buy" and is maintained [2][40]. Core Views - In the short term, the company is expected to benefit from industry recovery in 2024, with seamless customer expansion and improved management contributing to performance elasticity. In the long term, a focus on key customers, strong R&D, production enhancement, and efficiency improvements will strengthen the competitiveness of cotton socks, with optimistic capacity planning. The cotton sock segment is anticipated to maintain stable growth of around 10%, while the seamless segment is expected to become a driver of elastic growth. Given the better-than-expected Q1 performance and the ongoing improvement in seamless profit margins, the company's net profit forecasts for 2024-2026 have been revised upwards to 330 million, 380 million, and 430 million yuan, representing year-on-year growth of 23%, 13%, and 15%, respectively, with corresponding P/E ratios of 12, 11, and 9 [3][40]. Summary by Sections Financial Performance - In Q1, the company's revenue, net profit attributable to the parent, and net profit excluding non-recurring items were 549 million, 82 million, and 80 million yuan, respectively, showing year-on-year increases of 10.4%, 112.1%, and 164.7% [2][3]. Business Segments - The cotton sock segment is experiencing a strong recovery, driven by increased orders from high-quality clients like Uniqlo, leading to both volume and price increases. The seamless segment, however, is underperforming due to a high base from the previous year, but is expected to see profit improvements through cost reduction and efficiency gains [3][30]. Profitability Metrics - The overall gross margin is expected to increase by 7 percentage points year-on-year to 29.3%, marking the best performance in the last five years. The net profit margin is projected to rise by 7.2 percentage points to 15% [43].