FSM(002818) HUAXI Securities·2024-10-23 13:03Investment Rating - The report maintains a "Buy" rating for the company with a target price set at 14.67, reflecting a potential upside from the current closing price of 13.13 [1][4]. Core Insights - The company reported a revenue of 1.079 billion in the first three quarters of 2024, a year-on-year decrease of 6.81%. However, Q3 showed a revenue increase of 10.08% year-on-year, indicating a potential recovery in demand [2][4]. - The net profit for the first three quarters was 546 million, down 11.37% year-on-year, but Q3 net profit increased by 10.04% year-on-year, suggesting improved profitability in the latest quarter [2][4]. - The company is expected to benefit from a recovery in the housing market, supported by recent government policies aimed at stabilizing real estate [2][4]. Revenue Summary - For the first three quarters of 2024, the company achieved a revenue of 1.079 billion, down 6.81% year-on-year. Q3 revenue was 346 million, down 10.08% year-on-year [2]. - The company is positioned as a leading home goods retailer in Southwest China, with expectations for revenue recovery as the housing market stabilizes [2][4]. Profitability Summary - The gross margin for the first three quarters of 2024 was 68.14%, and the net margin was 51.86%, reflecting a slight decline compared to the previous year [3]. - In Q3, the gross margin was 65.32%, and the net margin improved to 60.46%, indicating effective cost control measures [3]. - The company maintained a low expense ratio of 4.70% for the first three quarters, with a slight decrease in sales and management expense ratios [3]. Financial Forecast - The company is projected to achieve revenues of 1.530 billion, 1.611 billion, and 1.707 billion for 2024, 2025, and 2026, respectively, with corresponding EPS of 1.00, 1.08, and 1.16 [4][6]. - The report anticipates a gradual recovery in profitability, with net profit expected to stabilize and grow in the coming years [4][6].