JONJEE(600872) Huachuang Securities·2024-12-09 06:10Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 31.35 CNY, compared to the current price of 23.21 CNY [1]. Core Views - The company has announced the acquisition of a 20% stake in Chubang Company, which will result in full ownership and is expected to enhance management efficiency and profitability starting from 2025 [1]. - The recovery of the stake is seen as a positive governance move, indicating the management's commitment to strategic reforms and operational improvements [1]. - The company is gradually adjusting its operations, with expectations for revenue and profit recovery in the latter half of the year, driven by pricing strategies and enhanced sales support [1]. - The report projects a significant increase in earnings per share (EPS) for 2024-2026, with adjusted forecasts of 1.43 CNY, 2.03 CNY, and 1.39 CNY respectively [1]. Summary by Sections Company Overview - The company is set to fully control Chubang Company, which is expected to contribute an additional 60-80 million CNY to the parent company's profits starting in 2025 [1]. - The average net profit of Chubang from 2021 to 2023 was approximately 190.93 million CNY, with the 20% stake previously contributing about 37.83 million CNY to the overall net profit [1]. Financial Performance - The company reported total revenue of 5,139 million CNY for 2023, with a projected increase to 5,774 million CNY in 2024, representing a year-on-year growth of 12.3% [1]. - The net profit for 2023 was 1,697 million CNY, with a significant projected decline of 34% to 1,120 million CNY in 2024, followed by a recovery to 1,594 million CNY in 2025 [1]. - The report highlights a recovery in operational margins, with Q3 showing positive revenue growth and significant profit improvement [1]. Strategic Initiatives - The management is focusing on optimizing the product portfolio and enhancing channel strategies to boost sales and market presence [1]. - The report emphasizes the importance of internal resource integration and management efficiency as key drivers for the company's future growth [1]. - The company is expected to benefit from land compensation and potential mergers and acquisitions, which could further enhance its financial flexibility [1].