Summary of Jifeng's Conference Call Company Overview - **Company**: Jifeng (继峰股份) - **Industry**: Automotive seating systems Key Points and Arguments - **Acquisition and Integration**: Jifeng has integrated Grammer through organizational adjustments, cost reduction measures, and market expansion in China. Despite global events impacting performance, significant improvements in overseas operations are expected in 2024, particularly after divesting the loss-making subsidiary TMD in the Americas [2][5] - **Regional Performance**: - **Europe**: Revenue slightly declined but outperformed the industry; EBIT doubled from 2.3% to approximately 4.6% [7] - **Americas**: Revenue decreased post-TMD divestment, but EBIT losses narrowed significantly, achieving profitability in Q1 [7] - **Asia-Pacific**: Revenue grew from €339 million in 2020 to €537 million in 2024, maintaining EBIT margins above 10% [7] - **Passenger Car Seat Business**: Expected to accelerate in 2025, with employee stock ownership plan targets indicating significant profit margin improvements in the coming years, enhancing performance confidence [3][12] - **Revenue Growth**: Jifeng's revenue is projected to grow from approximately ¥1 billion in 2023 to ¥3 billion in 2024, reaching ¥5-6 billion in 2025, and potentially nearing ¥10 billion in 2026. Net profit margins are expected to stabilize at 2% in 2025 and rise to 5% in 2026 [2][13] - **Domestic Brand Market Share**: Domestic brands are gaining market share in the passenger car seat sector, driven by increased penetration of new energy vehicles and shorter vehicle model cycles, creating opportunities for private enterprises like Jifeng [2][11] - **Barriers to Entry**: The passenger car seat industry has high barriers, including customer certification, technology, capital requirements, and production management capabilities, which create a favorable environment for Jifeng's growth [10] - **Future Outlook**: Jifeng's effective integration of Grammer and strategic adjustments are expected to significantly improve overseas performance. The passenger car seat business is anticipated to accelerate, further boosting profit margins and overall performance confidence [6][14] Additional Important Insights - **Investment Logic**: The investment rationale for Jifeng is based on the expected improvement in overseas operations and the anticipated acceleration of the passenger car seat business, which together enhance performance confidence for the near term [3] - **Profitability Forecast**: For 2025, Jifeng's net profit is projected to be between ¥600 million and ¥700 million, with expectations of reaching ¥1.1 billion in 2026 as operational efficiencies improve [14] - **Valuation**: Current stock price suggests a PE ratio of around 16 times for the next year, indicating high investment value following market downturns due to tariff impacts [14]