The company released its 23-year performance forecast:

In '23, the deduction was 124 million yuan (yoy -75%), the deduction was 72 million yuan (yoy -84%), Q4 was worth the mother of 38 million yuan (yoy -78%), and the deduction was 0.3 billion yuan (yoy -82%).

Q4 Revenue split: Domestic sales online and Japan's Aladdin dragged down overall revenue, but the decline in H2 narrowed.

We expect a high single-digit decline in Q4 revenue. There is a double-digit decline within China, with an obvious online pullback, and a significant offline recovery; overseas single-digit growth is expected, with high growth in overseas Europe and the US, but the decline in Aladdin in Japan is dragging down export sales. Overall, the decline in 23H2 was narrower than 23H1.

Profit analysis: ① Q4: Q1-2 Net interest rate 5-6%, Q3 loss, Q4 net interest rate is expected to return to 3%. ② Year 23: Due to fluctuations in the industry climate, the volume and price of the company's products declined, leading to a decrease in gross profit margin; however, the cost side (especially R&D) still maintained high expenses, causing loss of profit performance.

24-year outlook: The key to Jimi's bottom rebound is profit recovery. The core initiatives are: 2C projection cost reduction structure+horizontal expansion of 2B/overseas new markets. Specific measures currently in place are: ① 2C's main business: K-type consumption was clearly divided in '23. Jimi's previous layout was medium to high-end, and the layout for low-end products in the 1,000 yuan class was weak. It is expected that in '24, Jimi will strengthen its low-end product array with the LCD+ PLAY series; combined with the recent halving of the cost of 0.23" chips and the increase in the gross margin structure driven by LCD, the company's low-end product line profit is expected to recover. At the high-end, the company continues to focus on mixing technology and is expected to stabilize its leading position.

② 2B progress: Mainly commercial and educational products. The company's advantage lies in product technology, and the next development point is channel.

Currently, the company is increasing the 2B side staffing team. The commercial side has a high level of profit and is expected to contribute more profit.

③ Overseas development: Japan's Aladdin is still in the consolidation phase after being acquired in '22, which has an impact on the revenue side; however, the overall performance of overseas markets such as Europe and the US is improving quarter by quarter this year. The company has entered offline channels such as Germany, France, and West, and is expanding more European markets. Some North American 23Q3 products have gone offline.

Investment advice: maintain a buying rating

The company's leading projection position has not changed, but fluctuations in industry sentiment in 23 years have affected short-term performance. Looking ahead to 24 years, the company's main business will be adjusted while continuing to expand 2B and overseas growth. A phased recovery can be expected.

According to the 23-year forecast, we adjusted the 23/24/25 return to 1.24/2600 million yuan (previous value: 26/4.5/570 million yuan), corresponding to 44/28/21 times PE. Maintain a buy rating.

Risk warning: Domestic sales boom falls short of expectations, overseas growth falls short of expectations, and new business development falls short of expectations.