3QFY24 零售流水在低基数上实现较快增长。3QFY23 疫情波动带来终端销售的低基数（Kappa 品牌3QFY23 零售流水同比下滑20-30%中段），2023 年随着零售环境好转，Kappa 品牌3QFY24 零售流水同比增长40-50%中段。公司以“提效率、强准备、强运营”为战略核心，持续推动优化线下渠道布局及强化业务体系协同，季内Kappa 品牌同店销售同比增长20-30%高段。公司推动渠道管理效能及效率提升，季内Kappa 品牌净开13 家店至1,015 家。The company's recent situation
Kappa brand 3qfy24 (October-December 2023) retail sales increased 40-50% year over year in the middle, while same-store sales increased 20-30% year over year. As of the end of December, there were 1,015 Kappa brand stores.
reviews
3QFY24 retail turnover achieved relatively rapid growth on a low base. Fluctuations in the 3QFY23 pandemic led to a low base of terminal sales (Kappa brand 3QFY23 retail sales fell 20-30% year-on-year). In 2023, as the retail environment improved, Kappa brand 3QFY24 retail sales increased by 40-50% mid-year. With “improving efficiency, strong preparation, and strong operation” as the strategic core, the company continues to promote the optimization of offline channel layout and strengthen business system collaboration. The Kappa brand's same-store sales increased by 20-30% year-on-year during the quarter. The company promoted the improvement of channel management effectiveness and efficiency, and the Kappa brand opened 13 stores to 1,015 during the quarter.
In 4Q23, clothing consumption achieved relatively rapid growth in a low base, and sports consumption is expected to maintain its boom in 2024. October-December includes traditional peak consumption seasons such as Double Eleven, Christmas, and New Year's Day. Driven by the festive promotion atmosphere, clothing consumption grew rapidly at a low base. According to the National Bureau of Statistics, retail sales of clothing, shoes, hats, and knitwear increased by 7.5%, 22.0%, and 26.0%, respectively, from October to December. Compared with the same period in 2019, clothing consumption CAGR for October-December 2019-2023 was 1.9%, 1.7%, and 2.8%, respectively. We believe that clothing consumption is currently in a weak recovery stage. Sports shoes and clothing are still a highly prosperous sub-sector in the industry, and residents pay more attention to sports and health after the pandemic. As the 2024 Paris Olympics approach, we expect sports brands to continue to launch new products and actively sell in the Olympics. We expect to maintain a good boom in 2024.
Product innovation and rejuvenation continue to advance. The company continues to cultivate the Kappa brand's mid-to-high-end fashion sports brand positioning, promote brand rejuvenation, and enhance its appeal to young customers through innovative and diversified brand promotion activities, the creation of joint products and cross-border cooperation. The retro sports Kappa1916 series, the Kappa Player series for trendy groups, and the Kappa Gara series, which combines sports fashion and technology, continue to be updated and iterated. At the same time, the company will also strengthen one-stop resource integration and omni-channel product management to improve the efficiency of the Group's operations.
Profit forecasting and valuation
Keep the company's FY24/25 EPS forecast of 0.03/0.05 yuan unchanged. The current stock price corresponds to 9/5 times the FY24/25 price-earnings ratio, maintaining an outperforming industry rating. Maintaining a price-earnings ratio of 6.5 times FY24 for the company's apparel business, and taking into account the investment business value after the valuation discount, we maintained a target price of HK$0.34 based on a segmented total valuation, with 22% room for growth.
risks
Competition in the industry intensified, the terminal retail environment fell short of expectations, reforms fell short of expectations, and investment returns fluctuated.
