Investment Rating - The investment rating for the company is "Buy" [2] Core Views - The company, Juxing Technology, is a leading player in the tool export sector, focusing on brand development and global expansion to drive growth [8][12] - The company has seen significant growth in its OBM (Own Brand Manufacturing) revenue, which is expected to reach approximately 47.9% by 2024, indicating a successful transition from ODM (Original Design Manufacturing) to OBM [8][23] - The company has maintained a robust financial performance, with a projected CAGR of 19.4% in revenue and 22.7% in net profit from 2017 to 2024, despite facing challenges such as tariffs and the pandemic [8][12] Summary by Sections Company Overview - Juxing Technology, established in 1993, has evolved from an ODM-focused business to a leader in the OBM space, with a diverse product line including hand tools, power tools, laser measuring instruments, and storage cabinets [12][19] - The company has successfully expanded its brand matrix through both internal growth and acquisitions, enhancing its market presence in North America and Europe [12][19] Business Structure - The company's revenue is primarily derived from hand tools (68.1% of revenue in 2024), followed by industrial tools (21.8%) and electric tools (9.7%) [22][19] - The OBM business model has been instrumental in increasing profit margins and stabilizing revenue fluctuations, particularly during market downturns [23][28] Financial Analysis - The company has demonstrated strong financial metrics, with an average ROE of approximately 12.7% from 2017 to 2024, reflecting its status as a high-quality asset [25][26] - Revenue and net profit are projected to grow to 16.25 billion and 2.42 billion respectively by 2025, with year-on-year growth rates of 9.9% and 5.1% [7][8] Industry Analysis - The global tool industry is valued at over $100 billion, with a significant portion of demand coming from the North American market, which accounts for over 60% of the company's revenue [36][39] - The industry is currently at a cyclical low, but signs of recovery are anticipated as housing sales stabilize and inventory levels normalize [47][50] Competitive Advantages - The company has established strong relationships with major clients such as Home Depot and Lowe's, ensuring a steady order flow while exploring new markets through e-commerce [8][19] - Continuous investment in R&D, with a consistent allocation of around 3% of revenue, supports innovation and product development [8][19]