Under the disturbance of the epidemic situation, the terminal showed steady growth. FY2022H1, the company's revenue was 3.654 billion yuan, an increase of 17.6% over the same period last year, and the net profit returned to its mother was 551 million yuan, an increase of 37.2% over the same period last year. In the first half of the year, the terminal pipeline of the main brands grew by double digits compared with the same period last year, children's clothing increased by 20% to 25%, and e-commerce pipelined by 40% to 45%. Despite repeated epidemic situations in the first half of the year, the company still achieved eye-catching performance. We expect the company's Q3 to maintain double-digit growth. Among them, the main brands are expected to maintain double-digit growth from July to August, and the growth rate slowed down in September due to the local epidemic; children's clothing is expected to maintain a high growth rate of 20% +, and e-commerce is expected to maintain high growth.
New series and new products in 2023 are worth looking forward to. 1) running shoes are the main products. Cover beginners, advanced breakthroughs and professional racing to meet the diversified needs of runners. The company's top running shoes Flying Burning, Flying Burning ST and Feibiao series are highly appraised among the professional runners. 22H1, the running product line accounts for 42% of sales. 2) the tips of basketball shoes are constantly in stock. Mainly covers the low-and middle-end price belt, and continues to develop to the high end. Aaron Gordon's AG series, Ding Weidi's BIG3 series, continue to move into the field of high-end basketball shoes, 22H1 basketball products account for about 10%. 3) actively arrange women's training. The company plans to launch more professional women's fitness products in 23 years to meet the fitness habits of urban women. Professional products are both functional, fashionable and cost-effective, and are expected to be made into explosives. Besides. The company will also continue to enrich the boundary series of products and create a full product matrix.
Accurate marketing, brand power continues to improve. In addition to continuing to sponsor large-scale events in the professional field, signing popular stars in the field of fashion sports (Gong Jun, Wang Anyu), etc., the company matches its own product advantages, playing marathon "track 3" and basketball events "burning on the ground". Through the brand-owned events to gain traffic, the promotion of professional running shoes, basketball shoes, received a warm response among the contestants.
Investment suggestion: as a local sports shoes and clothing head brand, the company continues to build high-end products, deeply cultivate the popular price ratio market, and the channel layout focuses on the third-tier and below cities, misplaced competition and advantages appear.
At the same time, the company was successfully incorporated into the Hong Kong Stock Connect in September. We raised the company's homing net profit from 2022 to 2024 to 7.81x896max, an increase of 29.73%, 14.79%, 13.07%, and the current share price is HK $3.84 (calculated at an exchange rate of HK $0.91). The corresponding share price is 3.49 yuan), corresponding to a valuation of 9 times in 2022, compared with other sports shoes and clothing brands, the company still has room to improve its valuation and maintain its "buy" rating.
Risk tips: the epidemic and other uncertain factors lead to a decline in terminal demand; the number of stores is less than expected; the risk of inventory backlog; product research and development is not as expected.