JH Group(603518) 光大证券·2024-11-02 02:38Investment Rating - The report maintains a "Buy" rating for the company [2][8] Core Views - The company's Q3 performance has weakened sequentially, with expectations for gradual recovery in terminal retail [8] - The company is optimizing its channel structure, transitioning offline stores from direct management to franchise models to enhance operational efficiency [8] - There is an anticipated improvement in sales performance during the winter clothing season, alongside a more balanced business structure and increased franchise ratios leading to sustained profitability [8] Financial Performance Summary - For the first three quarters of 2024, the company reported a revenue of 2.92 billion yuan, a year-on-year decline of 5.6%, and a net profit attributable to shareholders of 160 million yuan, down 15.2% year-on-year [3] - In Q3 2024 alone, revenue was 850 million yuan, a 14.2% year-on-year decrease, with net profit dropping 70.6% to 13.89 million yuan [3] - The company's net profit margin for the first three quarters decreased by 0.6 percentage points to 5.5% [3] Brand and Channel Performance - Revenue by brand for the first three quarters showed TW brand down 3.8%, VIGOROUS down 17.7%, and Yunjin up 75.7% [4] - Online and offline channel revenues declined by 2.0% and 7.9% respectively, with Q3 showing a more pronounced drop of 5.8% online and 19.2% offline [4] Store Count and Structure - As of September 2024, the number of offline stores for TW brand and VIGOROUS was 1,060 and 189 respectively, reflecting a decrease of 38 and 8 stores since the beginning of the year [5] - The TW brand saw a shift of 53 direct stores to franchise, while VIGOROUS had a slight increase in direct stores [5] Profitability and Cost Structure - The gross margin for the first three quarters of 2024 was 69.3%, a slight increase of 0.1 percentage points year-on-year [6] - The operating expense ratio increased by 1.1 percentage points to 62.0%, with sales expenses rising [6] Cash Flow and Inventory - As of September 2024, inventory increased by 15.5% from the beginning of the year to 1.07 billion yuan, while accounts receivable decreased by 25.7% to 310 million yuan [7] - Operating cash flow for the first three quarters was 370 million yuan, a decrease of 21.6% year-on-year [7] Earnings Forecast - The company has adjusted its profit forecasts for 2024-2026, with net profit estimates reduced by 30%, 28%, and 28% respectively [8] - The expected EPS for 2024-2026 is projected at 0.73, 0.93, and 1.08 yuan, with corresponding P/E ratios of 10, 8, and 7 [8]