Citi raises the target price of JNBY to 22.5 yuan, with the performance in the first half of the fiscal year meeting expectations

Citigroup's research report indicates that JNBY (03306.HK) met expectations for the first half of the fiscal year 2026 ending in December last year, with revenue and net profit growing by 7% and 12% year-on-year, reaching RMB 3.38 billion and RMB 674 million, respectively. Despite facing challenges in the macro environment, management maintains its targets for fiscal year 2026, including a gross merchandise volume (GMV) of RMB 10 billion, revenue of RMB 6 billion, gross margin and net profit margin exceeding 65% and 15%, respectively, and a dividend payout ratio exceeding 75%.

Although encountering warm winter weather, the company's same-store sales growth for fiscal year 2026 to date (from July last year to February this year) has turned positive. The company continues to strengthen membership operations, brand value, and digitalization to drive growth. The number of active members in 2025 and the average annual consumption per member exceeding RMB 5,000 have both reached record highs.

The bank generally maintains its earnings forecast for JNBY, raising the target price from HKD 20.8 to HKD 22.5, and believes the company's valuation is attractive, with a dividend yield of about 8% being an ideal level, rating it as "Buy."