Core views:
The company published its quarterly report for '24. The 24Q1 company's revenue was 432 million yuan, +78.20% year on year; net profit to mother was 107 million yuan, +102.22% year over year.
Continuing to be deeply tied to overseas customers, the single product exploded and presented a large-scale effect. We expect the company's major customers to continue to sell popular single products and maintain high order levels. According to the company's annual report, the company's largest customer contributed 1,508 billion yuan in revenue in 2023, accounting for 84.91%, an increase of 17 pcts compared to 22 years. The company's major customer brand, Stanley, has strong marketing capabilities. Launching a concentration of popular models is conducive to increasing the scale effect of production and helping to maintain a high level of gross margin.
The Vietnamese plant was put into operation in 24, and production capacity was expanded to meet downstream demand. According to the convertible bond raising manual, the company's Vietnam fund-raising project with an annual output of 13.5 million is expected to be put into production in 24, and the annual production capacity will reach 4.05 million units after 25 years of utilization, thereby improving the company's ability to accept orders, while consolidating competitive barriers with low tariffs and low labor costs in the Vietnamese market.
Rates continued to be optimized during the period, and net gross profit increased steadily year over year. 24Q1's gross sales margin was 38.70%, +1.70pct compared to the previous year. Stanley's high-margin sales were very popular, which led to an increase in the company's gross margin. The net sales margin for 24Q1 was 24.88%, +2.95pct year on year, and the cost ratio for the period was 7.39%, and -5.17pct year on year. Among them, the sales/management/R&D/finance expense ratios were 1.02%/3.22%/-0.84%, respectively, and -1.26/-1.95/-1.08/-0.89pct, respectively. The improvement in scale effect drove the company's net sales margin.
Profit forecasting and investment advice. The company's net profit for 24-26 is estimated to be 6.0/7.4/880 million yuan, which is 13/11/9 times PE. Jiayi followed the symbiotic growth of major customers. Currently, it is still in the rapid growth stage. Referring to comparable companies, the company was given a reasonable valuation of 15 x PE in 24 years, corresponding to a reasonable value of 87.14 yuan/share, giving it a “buy” rating.
Risk warning. Geopolitical fluctuations; fluctuations in overseas economic consumption; customer order transfers; decline in overseas terminal demand, etc.