The domestic sales industry structure was rapidly divided, and Jimi restructured its product structure in line with the trend. As an optional category for young consumers, smart projection has been under overall pressure in domestic demand in '23. Lotu Technology data shows that industry sales have declined to 5.86 million units (YoY -5.1%). In terms of structure, entry-level and ultra-high-end products respectively met users' needs and extreme experience requirements, and their proportion increased rapidly. In order to adapt to the new trend, Jimi adjusted its product structure to the K type, mainly promoting the PLAY series, which is compact and portable and only sells for 1,799 yuan, and the high-end RS 10 series equipped with a three-color laser light source for eye protection.

618 The competitiveness of new products has been verified, market share has increased, and domestic sales revenue and profit margins are expected to gradually stabilize. Referring to the company report, PLAY5 became the number one single product in sales on the entire network, RS10 became the number one 4K single product, Jimi won 618 and 11 consecutive championships, and the online sales share increased by 14 pcts, and sales increased by 5 pcts (Aowei Cloud Network data). With the increase in the volume and share of new products, 24H2 domestic sales are expected to stabilize. At the same time, domestic sales profitability is expected to recover as old products are removed from the shelves and costs shrink.

Overseas local team building has been implemented, channel expansion has been accelerated, and a new inflection point in export sales growth can be expected.

Overseas home projection is still in its infancy. The company completed the construction of overseas local teams in '23, and market expansion began to accelerate. By channel, the German and French offline channels ushered in new breakthroughs in '23, and the North American Bestbuy channel has also entered. From a regional perspective, the overseas layout is expanding from Europe, America, Japan to emerging markets such as Australia, Southeast Asia, and the Middle East. In the short term, new markets and channels will drive the export business back to high growth, and in the long run, it will accelerate consumer education and brand building. Looking forward to the future, the share of high-margin export revenue will gradually increase, driving the company's overall profitability.

Profit forecast and investment advice: The company is a leader in intelligent projection. Domestic sales are gradually stabilizing, export sales are expanding at an accelerated pace, and performance is expected to resume growth. Net profit for 24-26 is expected to be 0.23, 0.41, and 0.52 billion yuan, respectively, with year-on-year growth rates of 91.4%, 76.9%, and 26.5%, respectively. The latest closing price corresponding to 2024 PE is 21.09x. Referring to the valuation level of comparable companies, the company was given 25 times PE in 2024, with a corresponding reasonable value of 82.38 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.