Introduction to this report:
The company raised the FY2024 revenue growth guide to 30%, and the profit growth rate is expected to be faster than revenue; many products such as FY2025 sunscreen and outdoor products are worth looking forward to, and emphasis is placed on investment opportunities in spring and summer.
Summary:
Investment recommendations The company has an outstanding position as a leader in the down jacket business, continues to expand in a variety of new categories, opens the ceiling for growth, and has high dividends (about 5%). The net profit forecast for FY2024-2026 was raised to RMB 28.7/33.9/RMB 3.97 billion (previously RMB 27.0/31.3/RMB 3.64 billion, respectively). The PE corresponding to the current stock price is 15/13/11X, respectively, giving a “gain” rating.
The FY2024 revenue growth guide was raised, and the profit growth rate was faster than revenue. Thanks to excellent sales performance during the peak season, as well as continued sales of light and light feather products after the peak season and the early launch of new spring and summer products, the company's FY2024 overall sales performance was excellent. The FY2024 revenue growth guide was raised to 30% (previously 20% +), and profit growth was faster than revenue.
More highlights of FY2025 are worth looking forward to: 1) Sunscreen clothing: At present, the company has launched new spring and summer products such as the Hot Sun series, holiday series, and outdoor camping series. FY2025 is expected to double its sales volume to about 1 billion with better product strength (leading technology/high quality/price ratio), wider channel penetration (1,500 direct companies+, new alliances added), and more marketing investment (40% expected to be launched online). 2) Outdoor products: In summer, an urban lightweight outdoor series will be added to sunscreen; in summer and autumn, single-shell jackets will be used to warm up for 2025; in winter, extreme cold protection outdoor products will be launched in the extreme cold series. 3) Lightweight feather: FY2024's annual revenue is expected to exceed 3 billion, and the FY2025 company's lightweight feather revenue target is 4.5 billion yuan or more. It is expected to launch a new lightweight feather series in September 2024. The basic model will be upgraded against Uniqlo's standard, and the variety and fashion level will be strengthened in terms of innovative models.
Pay attention to investment opportunities in spring and summer. Long-term winter down has established a basic performance market, and four seasons are worth looking forward to.
The Group's revenue target for the next three years is no less than CAGR (14%) of the past five years. In the long term, while advantageous winter down jackets continue to grow steadily, the sunscreen wear/lightweight feather/outdoor category is expected to become an important gripper for the company to achieve four-season transformation. Reviewing the monthly rise and fall of the company's stock price from 2018 to now, the average monthly rise and fall in April (the first month at the end of the fiscal year) and June (the month of publication of the annual report) was 7%/17%, respectively. Combined with the company's many highlights of new spring and summer products and promising sales performance in 2024, emphasis is placed on the company's spring and summer investment opportunities.
Risk warning: New category sales fall short of expectations, terminal consumption recovery falls short of expectations, etc.