Jason Furniture has reported 1H26 revenue of RMB9.88bn (+0.8% YoY), an attributable NP of RMB926mn (-9.3% YoY), and a recurring NP of RMB769mn (-14.6% YoY). For 2Q26, revenue reached RMB4.84bn (-0.9% YoY), the attributable NP came in at RMB429mn (-14.4% YoY), and the recurring NP was RMB359mn (-18.7% YoY). Earnings came under pressure in 1H26, mainly due, in our view, to the industry environment, exchange rate swings and changes in business mix. Looking ahead, the domestic business continues to focus on core categories and advance its retail transformation, positioning it to benefit from a gradual release of replacement and upgrade demand. The overseas business is expanding rapidly and continues to demonstrate operating resilience. We remain positive on the company’s brand equity moat and global growth potential. Maintain BUY.
Sofa revenue grows 10%+; bedroom flagships stand out
By product: 1) Sofa revenue reached RMB6.45bn in 1H26 (+13.8% YoY), with the gross margin at 35.2% (-0.9pp YoY). We attribute the solid growth in the core business mainly to a steady pipeline of new functional sofa products. 2) Bedroom product revenue reached RMB1.69bn (-0.1% YoY), with the gross margin at 39.8% (-3.0pp YoY). The two flagship products delivered growth despite market headwinds, while sales of premium bedroom products increased by 9.3% YoY. We think that this could help the company capture replacement and upgrade demand. 3) Integrated products/custom furniture generated revenues of RMB825mn/ RMB339mn (-29.1%/-38.7% YoY), with gross margins of 31.6%/32.8% (+1.4pp/ -0.3pp YoY), respectively. By brand, KUKA HOME and LAZBOY continued to strengthen their brand equity, while NATUZZI’s “model-home displays + targeted customer-community marketing” model delivered clear results. Gujia Lehuo accelerated its expansion into lower-tier markets and became a key growth driver in the mass market.
Earnings forecasts and valuation
Given that end-market demand has yet to recover, we lower our 2026-2028 revenue and gross margin forecasts. We now forecast attributable NP of RMB1.84bn/RMB2.03bn/RMB2.26bn for 2026/2027/2028 (previous forecasts: RMB2.10bn/RMB2.36bn/RMB2.64bn; lowered by 12.4%/13.8%/14.6%), with EPS of RMB1.98/RMB2.20/RMB2.44. Comparable companies trade at an average of 12x 2026E PE on Wind consensus. Given the company’s strong organizational and management capabilities, competitive advantages in retail operations, supply-chain management, and integrated warehousing, delivery, and services, as well as its industry-leading domestic retail transformation and integrated export capabilities, we think that it offers superior operating resilience. We apply 17x 2026E PE and derive our target price of RMB33.66 (previously RMB33.94 after adjusting for share capital, based on 15x 2026E PE and EPS of RMB2.26). Maintain BUY.
Risks: weaker-than-expected demand recovery, declining property sales, risks to international trade partnerships.