JGJC(000799) Orient Securities·2024-05-23 00:31Investment Rating - The report maintains a "Buy" rating for the company with a target price of 61.80 yuan [3][6]. Core Insights - The company reported a revenue of 2.83 billion yuan for 2023, a decrease of 30.1% year-on-year, and a net profit attributable to shareholders of 548 million yuan, down 47.8% year-on-year. For Q1 2024, revenue was 494 million yuan, a decline of 48.8%, with a net profit of 73 million yuan, down 75.6% year-on-year. The company declared a cash dividend of 10 yuan per 10 shares, with a payout ratio of 59.3% [1][2]. - Despite ongoing performance pressure, initial results of reforms are evident. The company has seen a significant increase in marketing expenses and core terminal numbers, with a 19% increase in effective core terminals and a 91% increase in bottle scanning volume in 2023. The company expects inventory levels to decrease as sales accelerate [1][2]. - The company has adjusted its revenue and gross margin forecasts for 2024-2026, predicting earnings per share of 1.65, 2.13, and 2.58 yuan respectively. The valuation method used is FCFF, resulting in an equity value of 20.1 billion yuan [2][6]. Financial Summary - For 2023, the company reported a gross margin of 78.4%, a sales expense ratio of 32.2%, and a net profit margin of 19.4%. In Q1 2024, the gross margin decreased to 71.1%, with sales and management expense ratios increasing [1][5]. - The company anticipates a rebound in performance in Q2 2024, driven by stable profits for distributors and improved channel confidence. The launch of the new version of its core product is expected to support pricing [1][2].