JONJEE(SH:600872) EBSCN·2024-10-28 04:11Investment Rating - The report maintains a "Buy" rating for the company [2][6]. Core Views - The company's main business showed year-on-year improvement in Q3 2024, reinforcing confidence in its ongoing reforms [2][3]. - For the first three quarters of 2024, the company achieved revenue of 3.946 billion yuan, a slight decrease of 0.2% year-on-year, while net profit attributable to shareholders was 576 million yuan, with a 19.3% increase in net profit excluding non-recurring items [3][4]. - The company has been actively enhancing its distribution channels and product offerings, with a focus on health-oriented products and price adjustments to improve channel profitability [4][6]. Financial Performance - In Q3 2024, the company reported revenue of 1.33 billion yuan, up 2.2% year-on-year, and a net profit of 230 million yuan, reflecting a 32.9% increase year-on-year [3][4]. - The gross margin for the first three quarters of 2024 was 37.4%, an increase of 4.8 percentage points year-on-year, while the net profit margin was 14.6% [4][6]. - The company’s revenue projections for 2024 to 2026 have been adjusted downward due to increased industry competition and weak demand, with expected revenues of 5.540 billion, 6.493 billion, and 7.661 billion yuan respectively [6][7]. Product and Market Dynamics - The revenue from soy sauce and chicken essence improved year-on-year in Q3 2024, while other product categories like edible oil saw significant declines [3][4]. - The company has increased its distributor count to 2,395, with a focus on enhancing recruitment efforts in the central and northern regions [3][4]. - The company has implemented price increases on certain products, primarily in the soy sauce and chicken essence categories, with increases around 30% [4][6]. Profitability and Cost Management - The company’s operating efficiency has improved, contributing to a rise in gross margins due to lower raw material costs and enhanced operational efficiency [4][6]. - The report indicates a slight increase in the expense ratio, primarily due to ongoing channel reforms and increased marketing efforts [4][6]. Valuation Metrics - The expected earnings per share (EPS) for 2024, 2025, and 2026 are projected to be 0.98 yuan, 1.25 yuan, and 1.54 yuan respectively [6][7]. - The report highlights a projected return on equity (ROE) of 14.94% for 2024, increasing to 17.74% by 2026 [7][8].