Our customers cover well-known leisure and sportswear brands at home and abroad.
The company is a fabric production, processing and garment production company with core production technology, which mainly serves middle and high-end brands at home and abroad, covering five major processes: spinning, fabric, dyeing and finishing, printing and embroidery, and garment cutting and sewing. Production capacity is distributed in China, Vietnam, Cambodia, Sri Lanka and so on. The company's main customers include Ralph Lauren, Uniqlo, Lacoste (French crocodile), Calvin Klein, Tommy Hilfiger, Youngor, Feile, Hugo Boss, Li Ning Co. Ltd., Armani, Burberry and so on. In 2018-20, the top five customers accounted for 53.2%, 55.3% and 53.3% of the company's revenue, followed by Uniqlo (14%), Ralph Lauren (12% of all the largest customers in 2018-19), Lacoste (11%), Fila (11%) and Hezhao Garment (6%).
Ralph Lauren FY22Q3 revenue increased by 28% to raise the annual guidance, business growth trend is obvious, orders are expected to hit bottom and reverse
Ralph Lauren FY22Q3 (2021-09-26-2021-12-25) had revenue of $1.815 billion, or 11.612 billion yuan, up 28% from a year earlier (excluding the exchange rate, the same below), and net profit of $218 million, or 1.392 billion yuan, up 81.7%.
From a separate channel perspective, FY22Q3's retail revenue was $1.249 billion, or about 7.989 billion yuan, an increase of 29.8 percent, while wholesale revenue was $525 million, or about 3.361 billion yuan, an increase of 21.2 percent. As of December 25, 2021, the company had 505 direct stores and 141 authorized stores, a decrease of 43 and 145 stores respectively compared with the same period in 2020.
From a regional point of view, the three major sales regions have all achieved double-digit growth rates, and FY20Q3 has also increased compared with that before the epidemic, of which revenue in Asia is 383 million US dollars, or about 2.447 billion yuan, an increase of 19.8 percent, accounting for 21.1 percent of the total.
Raise FY22 annual guidelines, expect annual revenue to increase by 39% Ralph Lauren with 41% increase in marketing investment to enhance brand potential energy, increase product average price, optimize product mix; at the same time, continue to expand sales areas and channels, launch Brave Lauren full-category shopping App in 2021, work with Roblox to enter Meta Universe, attract new high-end consumers, multi-engine-driven company expects medium-and long-term performance to continue to improve. Ralph Lauren raised the guidance for full-year revenue growth to 39%'41%, up from 34%'36%, and is expected to achieve revenue of about 39.13 billion yuan to 39.69 billion yuan.
Sales of major overseas customers resume, national brand is expected to expand, orders are expected to be optimistic Shengtai as an important strategic supplier of Ralph Lauren, the two sides have cooperated for decades, and Ralph Lauren has been Shengtai's largest customer for many years. From 2018 to 2020, Shengtai's revenue from Ralph Lauren accounted for 22.96%, 19.99% and 11.80% respectively. The epidemic affected Ralph Lauren in 2020. Ralph Lauren's own sales revenue declined and procurement decreased, but the cooperative relationship between the two sides is still relatively stable. The business volume of cooperation between the two sides may have recovered in 2021, and with the recovery and continued growth of Ralph Lauren's performance, the company's order volume is expected to continue to increase.
On the other hand, Shengtai is an important supplier of national brand (Anta Group and Li Ning Co. Ltd.) and the only platinum supplier of Fila knitted fabrics. Fila21H1 sales revenue of 10.8 billion yuan, 21 years or more than 20 billion, revenue share is expected to continue to increase.
In addition, Shengtai and Li Ning Co. Ltd. set up a joint venture (Guangxi Ningtai Garment Co., Ltd.). Shengtai sells knitted fabrics to Ningtai, Guangxi. Because the company has a competitive advantage in R & D and production of middle and high-end knitted fabrics, the cooperation between the company and Li Ning Co. Ltd. has been continuously deepened. the amount of knitted fabrics sold by the company to Ningtai, Guangxi has increased significantly in 2020, and it is expected that the order amount will continue to grow in 2021 and may enter the top ten customers in 2022.
Maintain earnings forecasts, maintain buy ratings
Shengtai's long-term cooperation with key customers is expected to maintain steady growth, while the company optimizes the customer structure and deepens cooperation with Anta, Li Ning Co. Ltd. and other national brands, with sufficient downstream orders; the company's factories in Henan, Vietnam and other places are expanding production, and it is expected that the 22-year production release will open up room for growth, and some factory automation transformation will further enhance profitability. We continue to value high-quality supply chain opportunities. It is estimated that in 2021-23, the EPS of the company will be 0.56,0.74,0.94 yuan respectively, and the PE will be 20,15,12 times respectively.
Risk tips: relying on a small number of customers, the progress of production expansion is not up to expectations, repeated overseas epidemics, shipping continues to be blocked and other risks.