Incident: Jiayi Co., Ltd. released its 2024 mid-year report. The performance during the reporting period exceeded expectations, mainly due to the increase in orders from the company's overseas customers, and the core technology accumulated by the company's industry-leading technological innovation capabilities “protected” the performance.
Overseas customer orders have increased, and cooperation with high-quality customers is stable. 2024H1 achieved revenue of 1.164 billion yuan, yoy +78.16%; net profit to mother 0.317 billion yuan, yoy +94.56%, and net profit margin to mother of 27.26%. Among them, single Q2 achieved revenue of 0.732 billion yuan, yoy +78.13%; gross margin reached 40.26%, an increase of 1.56 pct over the previous quarter; net profit to mother of 0.21 billion yuan, yoy +90.86%. The sharp increase in revenue was mainly due to an increase in sales revenue due to increased orders from overseas customers. In addition, 2024H1's net cash flow from operating activities reached 0.132 billion yuan, yoy +72.81%, which was also due to increased sales revenue and good accounts receivable repayment conditions. In recent years, the thermos mug industry has been booming, and the market size has continued to grow. Jiayi has cooperated with well-known brands of international stainless steel vacuum insulation vessels. The supplier selection process is complicated and the assessment dimensions are diverse. After cooperation, the two parties have reached a long-term stable strategic cooperation supply system. At the same time, the company has seized the opportunity to meet consumer needs through innovation and quality, and jointly promote high performance growth.
Continued investment in R&D helps to continuously increase market share as production capacity climbs. 24H1 invests 0.036 billion yuan in R&D, yoy +29.21%. The company continues to increase R&D investment and accumulate core technology. It has a significant first-mover advantage in product quality control and improving the level of intelligence, which ensures product updates and iterations, and continuously meets the individual needs of major customers and end consumers. In addition, 24H1's management expenses were nearly 0.046 billion yuan, a year-on-year increase of 41.36%. In addition to the expansion of business scale and the increase in management personnel, it was mainly due to the company's investment in early operating expenses in Vietnam's production capacity. The decline in production capacity may help increase the company's order acceptance capacity and market share.
Investment advice: The company is expected to achieve revenue of 2.421/2.884/3.395 billion yuan in 24/25/26, up 36.4%/19.1%/17.7% year on year; net profit to mother is 0.703/0.847/0.994 billion yuan, up 48.8%/20.5%/17.4% year on year. I am optimistic about the company's strong ability to obtain orders and performance-driven sustainability brought about by unleashed production capacity, and give it a “buy” rating.
Risk warning: raw material price fluctuations; exchange rate fluctuations; risk of domestic and foreign environmental changes.