The company's recent situation
The company released the “618” Kickoff Report: As of 12 p.m. on June 1, Jimi ranked first in the projection category in GMV & sales on the JD, Tmall, and Douyin platforms.
reviews
Sales have bottomed out and the competitive landscape has improved: 1) Since 2022, as a single product with strong entertainment attributes, demand for home projectors has clearly weakened and brand competition has intensified. After experiencing a marked decline in domestic sales in 2Q23, 2H23 Jimi actively responded to competition through measures such as product subsidies and portfolio adjustments. 2) Sales of rice in 1Q24 basically stopped falling and rebounded, but the decline in average price due to price competition still dragged down revenue. According to Jiukan data, online sales volume of Jimi from January to April 2022/2023/2024 was -7.8%/-22.1%/+12.3%, respectively, and sales were +2.5%/-23.6%/-4.8% YoY. 3) At a stage where industry prosperity is weak, Jimi has strong R&D capabilities as an industry leader and listed company. It still maintains investment in products, and continues to achieve breakthroughs in fields such as mixed light, three-color laser for eye protection, and intelligence. According to Jiuqian data, in January-April 2024, Jimi's online retail sales market share rebounded to 25.6%, +8.2ppt compared to the previous year.
Technological advances+supply chain cost reduction, rapid spread of laser products: 1) Compared with LED light source projection products, laser light sources have a significantly higher brightness upper limit and cover a wider color gamut, but they have not been popular until now due to technical maturity and cost issues. 2) Since 2023, supply chain cost reduction and technological progress have driven products to continue to mature. Mainstream brands have successively launched new laser products, such as Jimi RS 10 series, Vidda C1/C2 series, nut N1S series, Dangbei X5/X6/D6X series, etc., and some mid-range products have dropped to 5,000 yuan, and the average price of entry-level laser projection products can be reduced to less than 3,000 yuan. 3) According to data from Lotu Technology, online sales of laser light source products (excluding laser TVs) accounted for 5.2% and 14.6% respectively during the 3Q23 and 2023 Double 11 periods, respectively. Compared with +2.4ppt and +8.1ppt, the sales share in the first quarter of 2024 reached 9.1%, a significant increase from 4% in 2022.
Competition on low-end racetracks is still divided, and the Jimi Play series has achieved breakthroughs on low-end tracks and Douyin platforms with its high cost performance ratio. 1) The unit price of LCD projection products is lower than DLP, and the performance of closed optical machine products has improved markedly in recent years, driving the rapid release of LCD starting with 1H22. By 1Q24, LCD's share had basically stabilized at 69%, and DLP's share had dropped to 30%. 2) LCD products have little differentiation, making it difficult to form brand recognition. 3Q23 Jimi launched a Play3 single product, benchmarking the 1.5k-2k price range. 3) Since 4Q23, the Play series has driven Jimi to increase sales significantly on the Douyin channel. According to Feigua data, in May 2024, the Jimi brand had sales of nearly 40 million yuan on the Douyin channel, +128% year-on-year. The sales scale ranked first in the industry, clearly leading the share, achieving a double breakthrough in the low-end market and Douyin channel.
Profit forecasting and valuation
We maintain our 2024/2025 profit forecast of 255 million/376 million yuan. The current stock price corresponds to the 2024/2025 price-earnings ratio of 28.0x/19.0x. Maintaining an industry rating and target price of 120 yuan, corresponding to 33.0 times/22.4 times the 2024/2025 price-earnings ratio, with an upward margin of 18%.
risks
Competition increases risk; risk of new product sales falling short of expectations; risk of fluctuating raw material prices.