Zhitong Financial APP learned that Macquarie released a research report that reaffirmed the "outperform" rating of O'Shudan (00973). With its expanding product portfolio and flexible channel strategy, it is believed that it is expected to achieve an improvement in structural gross profit margin, raising its profit forecast for the 2022-23 fiscal year by 13% to 8.8%, with the target price raised from HK $33.10 to HK $38.

The bank believes that due to the company's robust marketing activities, new product launches and generally strong sales in the second half of the fiscal year, it is optimistic about its target of a gross profit margin of more than 15% for the whole year. It predicts that the company's recent entry into new markets will pave the way for future sales growth and that the epidemic may cause countries to take different measures to contain it, but it is expected to strengthen its e-commerce business to make up for weak offline sales.

According to the report, the company's acquisition of 83 per cent indirect stake in Sol de Janeiro, which accounts for 65 per cent of its sales from e-commerce, should help Oshudan enter new markets quickly, and Sol de Janeiro can also expand offline using the company's global distribution network. It is expected that the addition of Sol de Janeiro will help expand its young customer base and increase its presence in North America.