Core views:
Jimi Technology released its 2024 quarterly report. 24Q1 revenue of $8.3 billion (YoY -6.6%), net profit attributable to mother of $0.1 billion (YoY -72.6%), after deducting non-net profit of $08 billion (YoY -80.5%).
The 24Q1 revenue report declined slightly, and revenue growth is expected to resume rapidly as competitive new products are launched one after another. Profits are still declining, mainly due to the high profit margin base in 23Q1, and we look forward to a subsequent inflection point in profits.
The company's gross margin bottomed out in 24Q1, and the cost ratio was well controlled. 24Q1 gross profit margin was 28.1% (YOY-6.8pct), but it was 0.1 pct higher than 23Q4. 24Q1 net profit margin was 1.7% (Yoy-4.2pct), and sales/management/finance/R&D expense ratios were +2.0pct/-0.8pct/-1.3pct/-0.8pct, respectively. The overall decline in cost rates was mainly due to the company's better cost control.
In terms of domestic sales, the product structure has been rapidly restructured, and we look forward to a recovery in new product sales and profit margins. In terms of domestic sales, the company's product structure was rapidly restructured in '24, and the new high-end RS 10 series (price is about 10,000 yuan) equipped with a three-color laser light source for eye protection and the new portable PLAY5 (price 1,799 yuan) were released one after another. According to company data, the pre-sale volume of the PLAY5 exceeded 10,000 units in the first two days, an increase of 2,300% over the previous generation of products. It is expected that the release of new products and the removal of old products will drive domestic sales revenue to resume growth, while profit margins will gradually recover.
In terms of export sales, overseas expansion is accelerating, and new channels are expected to expand. Jimi's overseas localization team was gradually formed, new products were launched one after another, offline channels were rapidly expanded, and it has successfully entered important overseas retail channels such as Best Buy. We look forward to the accelerated expansion of overseas markets and the expansion of new channels in 24 years.
Profit forecast and investment advice: The company is a leader in the intelligent projection industry. Net profit is expected to be 3.0, 5.0, and 610 million yuan respectively in 2024-2026, with year-on-year growth rates of 146.6%, 67.2%, and 23.5% respectively. The latest closing price corresponding to 2024 PE is 23.02x. Referring to the valuation level of comparable companies, the company was given 25 times PE in 2024, with a corresponding reasonable value of 106.13 yuan per share, giving it an “increase in holdings” rating.
Risk warning: Some parts are dependent on the risk of outsourcing, demand in overseas markets is weak, and competition is intensifying.