GTHT Securities has issued a research report initiating coverage on JST GROUP (06687) with an "Add" rating. The firm forecasts the company's revenue for 2025-2027 to reach RMB 1.133 billion, RMB 1.402 billion, and RMB 1.706 billion, representing year-on-year growth of 24.55%, 23.69%, and 21.73%, respectively. Net profit attributable to shareholders is projected to be RMB 180 million, RMB 360 million, and RMB 557 million, with EPS of RMB 0.41, RMB 0.82, and RMB 1.28. Utilizing PS and PE valuation methods and adopting a conservative approach, a target price of HKD 28.56 has been set. Key points from GTHT Securities' report are as follows.

JST GROUP is recognized as the largest e-commerce SaaS ERP provider in China. From 2022 to 2024, the company achieved revenues of RMB 523 million, RMB 697 million, and RMB 910 million, with net profits attributable to shareholders of RMB -505 million, RMB -487 million, and RMB 12 million. Its gross margin improved significantly from 52.3% to 62.3% and further to 68.5%, indicating sustained enhancement in profitability. According to the company's prospectus, the LTV/CAC ratio reached 9.3 in 2024, substantially higher than the industry average of 3, reflecting high customer acquisition efficiency. In the first half of 2025, revenue was RMB 524 million, up 24.39% year-on-year, while the net loss attributable to shareholders narrowed by 30.08% to RMB -41 million.

The company has developed an innovative and comprehensive product matrix, fostering high customer stickiness and product synergy. Its e-commerce ERP system covers the entire process chain, including order management, warehousing, procurement, and distribution, and has been extended with several SaaS+AI products. The number of SaaS customers has grown consistently from 45,700 in 2022 to 88,400 in 2024, while the net revenue retention rate increased from 105% to 115%, demonstrating strong customer loyalty coupled with rapid new customer growth. Furthermore, product synergies have driven robust cross-selling; in the first half of 2025, customers purchasing two or more products contributed 39.3% of total SaaS revenue.

JST GROUP's AI-powered ERP system focuses on deep scenario application, aiming to augment rather than replace existing functions. The company adheres to the principle of "delivering outcomes, not just technology or tools," integrating AI as a foundational capability embedded within its products. By leveraging multiple base models and a self-developed AI gateway for unified scheduling, JST GROUP has built a comprehensive AI capability matrix encompassing RPA, intelligent agents, and knowledge bases. In the e-commerce sector, AI is extensively applied across various scenarios such as customer service, product management, order processing, and cross-border operations. The deep integration of data, scenarios, and trust has established significant barriers for JST GROUP's AI+ERP solutions, which are now deeply embedded in clients' core operations and decision-making systems.

Potential risks include weaker-than-expected customer demand, slower-than-anticipated advancements in AI technology, and intensifying market competition.