Shenwan Hongyuan: Maintain JS Global Life (01691) "Buy" rating Short-term pressure on the profit side Prepare for the fourth quarter promotional season

Zhitong Finance APP learned that Shenwan Hongyuan released a research report saying that it maintained the "buy" rating of JS Global Life (01691) and maintained the net profit forecast attributable to the mother for 2021-23 at 4.42/5.14/584 million US dollars, an increase of 28%/16%/14% respectively, corresponding to a valuation of 15/13/11 times.

Shenwan Hongyuan's main views are as follows:

The port of Cyprus led to a slowdown in some revenue recognition, and the rise in maritime and chip costs affected the performance of the profit side

1) Revenue side, mainly due to the problem of the PORT OF CYPROR in the United States and the lack of capacity in July and August, which led to a slowdown in revenue recognition. The company has a backlog of goods at the port of Los Angeles in the United States, which cannot be transported to the warehouse or terminal at present, resulting in a delay in revenue recognition. In addition, some ports in Southeast Asia have also recently been closed and have not contributed to revenue.

2) On the profit side, due to the significant increase in shipping costs in July and August, the gross profit margin was affected; Late September was affected by maritime issues in the European market; Factors such as the increase in chip procurement costs in the third quarter affected the performance of the profit side.

In the fourth quarter, it is expected to recognize deferred revenue, and the impact of the policy support on the port of Cyprus will gradually be eliminated

1) The fourth quarter is expected to reflect the deferred recognition of revenue. The company's overseas channels are mainly DTR models, and the partners are top retailers in Europe and the United States, and the probability of deferred revenue recognition is concentrated in the fourth quarter. The company said that it will take measures to solve the problems caused by the port as soon as possible, including coordinating the port, prioritizing the unloading of urgently needed orders from customers, and managing the impact of the problem on revenue.

2) The impact of The port of Cyprus is expected to continue to ease under the support of policies. The ports of Los Angeles and Long Beach, the two largest ports in the United States, will operate 24 hours a day, 7 days a week to solve the problem of cargo congestion in the port and allow cargo trucks in the United States to transport goods at night when traffic is more smooth, coping with the tension in the consumer goods supply chain. Large companies such as U.S. retail giant Walmart, ups, and FedEx, the two largest U.S. delivery companies, will also extend shipping hours and increase the number of containers to increase the supply of goods. The bank expects that the problem of Port Cyprus will continue to ease with the support of policies, and the company's deferred recognition of revenue will be reflected in the fourth quarter.

In the third quarter, the overseas market demand was strong, and the company actively prepared for the fourth quarter promotional peak season

The European and American markets have strong demand in the third quarter, terminal sales are good, and the revenue growth rate of the North American market is expected to be close to 30%. 1) Domestic power double eleven, continue the online advantage. The company's 20-year double eleven topped the Tmall steam mop & electric mop double crown throne, brand power and product strength continue to be recognized by domestic consumers, this year's double eleven pre-sale results are excellent, is expected to create another good performance.

2) Increase marketing efforts during overseas sales seasons. Overseas fourth quarter black Friday and Christmas is the traditional peak sales season, the company said that the fourth quarter will increase the dissemination and launch of new products, seize the promotion season, the bank is expected to maintain revenue growth of more than 10% in the fourth quarter.

Risk warning: the price of raw materials has risen sharply, etc.