Core views:
The company released its annual performance forecast for 24 and a half years. 24H1 expects to achieve net profit of 0.305-0.325 billion yuan, +87.06%-99.32% year over year; net profit without return to mother 0.3-0.32 billion yuan, +81.64%-93.75% year over year. The profitability is impressive and exceeds market expectations.
The industry is still booming. According to data from China's General Administration of Customs, China's thermos mug exports increased 19.1% year on year from January to May 2024, and May alone achieved a remarkable year-on-year growth rate of 36.1%. The thermos mug industry is expected to maintain double-digit growth, supported by multiple factors such as the boom in outdoor sports, continued social media word of mouth, support from e-commerce channels, and increased investment in independent brands, driving industrial chain companies to experience a continued high increase in orders.
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 products, and order levels will remain high. 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 16.61 pcts compared to 22 years. The company's major customer brand, Stanley, has strong marketing capabilities and continues to launch a variety of popular cup types, which are highly accepted by consumers. Jiayi undertakes the concentration of order styles, which is conducive to increasing the scale effect of production and helping to raise gross margin to the next level.
Factories in Vietnam have been put into operation one after another, and production capacity has been expanded to meet downstream demand. According to the company's convertible bond collection instructions, Jiayi Vietnam's annual production and construction project for stainless steel vacuum thermos cups is expected to continue to advance. It is estimated that the production capacity will reach 4.05 million in the year it is put into operation and the utilization rate will continue to climb, thus further improving the company's ability to accept orders, while consolidating competitive barriers with low tariffs and low labor costs in the Vietnamese market.
Profit forecasting and investment advice. The company's net profit for 24-26 is estimated to be 0.7/0.87/1.05 billion yuan, corresponding PE of 11/9/8 times. 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 13xPE over 24 years, corresponding to a reasonable value of 87.01 yuan/share, maintaining a “buy” rating.
Risk warning. Geopolitical fluctuations; transfer of customer orders; decline in demand for overseas terminals, etc.