Pacific Securities: Initiates coverage of JF SMARTINVEST (09636) with a "buy" rating. Order volume increasing, gross profit and net profit improving.

The Pacific Securities released a research report, covering JF SMARTINVEST (09636) for the first time, giving it a "buy" rating, and forecasting operating revenue of 39.78, 46.78, and 53.05 billion yuan for 2025-2027, with net profit attributable to the parent company of 14.88, 18.19, and 20.80 billion yuan, and diluted EPS of 3.18, 3.88, and 4.44 yuan. The company is one of the earliest domestic securities investment advisory institutions to use a large-scale customer acquisition matrix with deep channel and traffic barriers; actively expanding its product matrix, and through acquisitions of Hong Kong securities firms and layout of digital asset businesses, it has embarked on a globalization strategy, with the potential to tap into incremental space. Event: In the first half of 2025, the company achieved operating revenue of 21.0 billion yuan, a year-on-year increase of +133.8%; and achieved net profit attributable to the parent company of 8.65 billion yuan, realizing a turnaround year-on-year. The main points of The Pacific Securities are as follows: Stable financial structure, continuous improvement in operational efficiency The company's gross profit margin for 2025H1 reached 88.2%, an increase of +8.3% year-on-year, and the net profit margin was 41.2%, realizing profit elasticity under the expansion of scale. Sales/management/research and development expenses were 660 million yuan, 240 million yuan, and 150 million yuan respectively, with year-on-year increases of +19.7%, +20.1%, and -4.5%, demonstrating effective cost control. The core business of the company maintains rapid growth In the first half of 2025, financial software sales and service revenue achieved strong expansion, with an order amount of 16.1 billion yuan, a year-on-year increase of +74.3%; and paid users of 102,000, a year-on-year increase of +152.7%. Customer satisfaction and retention rates have improved simultaneously, with a refund rate of 24.6%, a year-on-year decrease of -5.9 percentage points, establishing a scale advantage in the fields of investment education and subscription services. Technological and product innovation is the core of growth During the reporting period, the company's R&D expenditure was 147 million yuan, with 505 R&D personnel, an increase of +15.6% from the beginning of the year. The company has accumulated 139 software copyrights and patents, an increase of +21 from the previous year, reflecting the continuous accumulation of research and development achievements. The intelligent investment advisory system serves 373,000 customers, with a total service frequency of 13.515 million times, AI technology is extensively applied in core investment advisory business, supporting product upgrades and efficiency improvements in customer conversion. The company's technological barriers in the financial technology field are further strengthened. Marketing and brand operation capabilities are improving in parallel The company operates a total of 994 accounts on platforms such as Douyin, Kwai, Xiaohongshu, and Bilibili, an increase of +103.69% year-on-year, with a total of 63.06 million fans, an increase of +38%. User coverage and brand exposure have significantly increased, forming a traffic foundation for acquiring new customers and selling products.