JH Group(SH:603518) Tianfeng Securities·2024-06-07 06:02Investment Rating - The report maintains a "Buy" rating for the company, with a target price set at 8.96 yuan [7]. Core Insights - The company has established a strong offline sales channel network across major cities, focusing on enhancing the performance of its direct-operated stores in high-end shopping centers and department stores in 2023 [2][3]. - The company is actively expanding its franchise business, particularly in less developed regions, aiming to create a robust offline marketing network [3]. - The company has optimized its borrowing structure, leading to significant profit improvements, with projected net profits for 2024-2026 expected to be 377.21 million, 448.22 million, and 520.42 million yuan respectively [4][10]. Summary by Sections Company Overview - The company operates three main brands: Teenie Weenie, VGRASS, and Yuanxian, covering mid to high-end product lines, forming a pyramid-shaped brand matrix [4]. Financial Performance - In 2023, the company reported a revenue of 4.55 billion yuan, a year-on-year increase of 16.6%, and a net profit of 297.62 million yuan, a significant increase of 316.8% [7][11]. - The gross margin for 2023 was 69.2%, remaining stable compared to the previous year, while the first quarter of 2024 showed a slight increase to 70.2% [7][11]. Revenue Growth - The revenue growth in 2023 was driven by a recovery in domestic market demand, with both offline and online revenues increasing [7]. - The company has seen a rapid growth in franchise revenue, particularly through converting existing direct-operated stores to franchises [4][11]. Future Projections - The report adjusts profit forecasts, expecting net profits for 2024-2026 to be 377.21 million, 448.22 million, and 520.42 million yuan, with corresponding EPS of 1.09, 1.29, and 1.50 yuan per share [4][10]. - The company is expected to continue benefiting from its channel reforms and the expansion of its online business [4].