Incidents:
Jimi Technology disclosed its 2023 annual report: The company achieved annual revenue of 3,557 million yuan, net profit of -15.8% year on year, net profit of 121 million yuan, year-on-year, -76.0%, net profit of 68 million yuan, -84.6% year on year; achieved revenue of 1.35 billion yuan, -15.3% year on year, net profit of 34 million yuan, -80.0% year on year after year; planned dividend of 20 million yuan (tax included) for fiscal year 23, with a dividend rate of 16.9%.
Sales of telephoto projections are declining, and internet revenue is growing faster
Due to industry pressure, the company's long-focus projection sales volume was -14% year over year, but the cost-effective Play3 performance exceeded expectations. The quarterly sales volume ranked in the top 10 domestic projector sales for the whole year, and structural changes led to an average price ratio of -9%; the Aladdin projector sales model changed from ToB to ToC, innovative product volume/price ratio +12%/+6% in 23 years; the company's short focus projection matrix was further improved. Based on the original laser TV, ultra-short throw projection/price ratio was +162%/-52%. In addition, in '23, the company's Internet value-added service revenue benefited from the volume of “Watermelon Game” applications and achieved relatively rapid growth.
Cost-effective products drag down gross profit, and net interest rates are under pressure in the short term
The company's annual gross margin of telephoto projection was -8 pct year on year, mainly due to the increase in the share of cost-effective products in the second half of the year, and its own gross margin also declined. Domestic/overseas gross margins were -7/-3 pct year on year, respectively. Q4's gross margin was -6pct year over year, and the sales expense ratio was +4pct year over year, mainly due to increased marketing efforts during the company's big promotion period. In addition, the financial expense ratio was +2 pct year over year, compounded by inventory impairment losses. Under the combined influence, the Q4 operating profit margin was -14pct year over year; net profit margin to mother was -10pct to 3% year over year, putting pressure on the short-term trend.
Continuing to innovate and the brand to go overseas, the business is expected to bottom up
Despite the poor industry boom, the company persists in innovating and actively adapting to the K-type consumer differentiation trend. On the one hand, the company launched the new high-end RS 10 Ultra series, equipped with a number of new technologies such as a three-color laser for eye protection, to set a new benchmark for intelligent projection in China. On the other hand, it iterates on Play5 based on the best-selling Play3, continuing to focus on being compact and flexible, which is expected to balance consumer experience and cost optimization; at the same time, the company insists on going overseas to strengthen overseas localization team building and expand overseas regions and channel coverage. As the company recovers its profitability on the basis of product structure optimization and continuous overseas expansion, operations may gradually bottom up.
Projection leaders are poised to launch, maintaining a “buy” rating
Constrained by the sluggish economy, the company's short-term performance is under pressure, but the company insists on independent innovation, launches a variety of new products, and is expected to bottom out. The estimated 24-26 revenue is 41, 48, and 5.6 billion yuan, +16%/+16%, respectively, and 2.6, 5.0, and 550 million yuan, respectively, +116%/+93%/+12% year over year, EPS is 3.7, 7.2, 8.0 yuan, and the CAGR for 23-26 is +67%. The company was given 30 times PE for 24 years, the target price was 111.30 yuan, and the “buy” rating was maintained.
Risk warning: 1) Domestic and foreign demand falls short of expectations; 2) Raw material prices and exchange rates fluctuate greatly.