Introduction to this report:
The company's 2023 performance slightly exceeded expectations, and the annual dividend ratio was as high as 40%; 2024Q1-3 orders will perform well, and it is expected that the 2024 annual results will maintain a high increase.
Summary:
The investment proposal company is a leader in sports footwear and apparel in the domestic market. It is optimistic that the medium- to long-term large sales channel structure will continue to be optimized. NBA players will cooperate to strengthen brand influence and product expertise. Children's clothing is expected to create a second growth curve, and has high dividend characteristics. The net profit due to mother in 2024-2026 is estimated to be 11.3/13.2/1.52 billion yuan, respectively, and the corresponding PE is 7.5/6.5/5.6 times, respectively, maintaining the “increase” rating.
The 2023 results slightly exceeded expectations, with a full year dividend ratio of 40%. In 2023, the company's revenue was 8.42 billion yuan, up 21% year on year; net profit to mother was 960 million yuan, up 28.7% year on year. The performance growth rate was nearly 4 pcts higher than the lower limit of the previous performance forecast; gross profit margin was 41.1%, up 0.6 pct year on year. For the full year of 2023, the company's dividend was raised to 0.19 yuan per share, and the dividend rate was about 40% (2023H1 was 18%), corresponding to the current dividend rate of about 4%.
The growth rate of children's clothing was impressive in 2023, and e-commerce channels led the growth. 1) By category: The revenue of bulk/children's clothing in 2023 was 63.6/1.96 billion yuan respectively, up 17%/36% year-on-year respectively. Among them, children's clothing performed particularly well. Store efficiency increased by nearly 10-12%, and the number of stores increased by 257 compared to the end of 2022. 2) Channel division: Offline/e-commerce revenue in 2023 was 60.9/2.33 billion yuan respectively, up 15%/38% year-on-year respectively. Online sales continued to grow rapidly, becoming one of the core drivers of performance growth. At the same time, e-commerce retail products are effectively separated from offline to consolidate e-commerce business advantages.
Since 2024, turnover is expected to continue to grow rapidly, and the excellent performance of orders in the first three quarters lays the foundation for high growth throughout the year. Since 2024, domestic clothing retail has continued to recover weakly. Considering the company's sinking market position, the product is relatively cost-effective and in line with current consumer trends, we expect the company's terminal turnover to continue to grow rapidly. The company's 2024Q1-3 order meeting has ended, and the growth rate is impressive. It is mainly driven by volume growth, and the ASP increase is small. Considering that the company is mainly based on a distribution model, orders can generally lock in more than 90% of revenue, and we expect the company's revenue to grow close to 20% in 24 years.
Risk warning: industry competition intensifies; terminal consumption falls short of expectations, etc.