Spring and summer sunscreen products set off a small boom in sales. The company launched a spring and summer “sunscreen”, using down jackets as the foundation to derive cross-season products and expand incremental business.
The sunscreen market is expanding, and brand power+professional technology seize the middle and high-end market share. The market size of China's sunscreen clothing market continues to expand. In 2021, the market size reached 61.1 billion yuan. According to data from the China Research Pu Hua Industry Research Institute, the market will grow at a compound annual growth rate of 9.4% from 2021 to 2026.
Sunscreen clothing continues to rise in popularity among consumers. According to Magic Mirror insight data, topics related to sun protection clothing on mainstream social media topped 4.371 million in 2023, an increase of 104.5% over the previous year.
At the same time, consumer demand scenarios have changed from standardization to cover diversification in everyday life, outdoor, business, etc., and the demand for sunscreen has evolved from functionality to a sense of style. With the brand influence and professional strength accumulated by the brand in the field of down jackets, the company injects vitality into the homogenized market with professional product selection and stylish design.
The average price of Bosideng sunscreen is over 450 yuan, focusing on the middle and high-end market. According to Magic Mirror insight data, in 2023, Bosideng's products topped the brand list in terms of market size and product sales in the sunscreen market of 400 yuan or more on major e-commerce platforms (Tmall and JD). In 2024, Bosideng began the era of sunscreen 2.0, launched a more stylish professional sunscreen, breaking the traditional single form of sunscreen, and paying more attention to the development of professional sunscreen functions and fashion color version design. We expect sales of sunscreen clothing to increase in 24 years.
TOP stores focus on clarifying target markets and building TOP channels to respond quickly to demand. The company continuously optimizes the channel structure through in-depth analysis of core regions and main markets. In terms of improving the efficiency of single-store operations, adjust store locations and upgrade terminal images, and close inefficient stores; at the same time, strengthen new retail capabilities, adopt private store operation strategies, introduce and increase traffic, and boost single-store operation capabilities. In terms of leading the benchmark region, effective resources are allocated to appropriate channels by focusing on benchmark stores, building tens of millions of stores, and entering shopping centers and Ole, etc., to drive the steady progress of channel construction.
In addition, the company implemented storage space allocation and product storage according to the market sales situation and combined with different strategies. In the process, it strengthened the front-end position of the best-selling model (top model), and continuously improved the yield for replenishment.
Raise profit forecasts and maintain “buy” ratings
The company continues to consolidate the brand image of “the world's leading down jacket expert”, from the world's leading brand perception of down jackets to a comprehensive global leader in down jackets; continuously deepening consumers' awareness and reputation of the brand through a strategy of strong brand campaigns and strong sales, and achieving brand leading perception and product sales maximization goals; considering the high increase in feather sales from the end of 23 to early winter of '24, and the improvement or increase in sales in the spring and summer of '24, we raised our profit forecast. The company's revenue for FY24-26 is 216 and 256, respectively, RMB 29.4 billion (previous value: RMB 203, 237 billion, RMB 27.7 billion), net profit to mother was RMB 28.7, 34.2, and 3.96 billion yuan (previous value: RMB 27.1, 31.8, and RMB 3.74 billion), corresponding EPS was 0.26, 0.31, and 0.36 yuan/share (previous values were 0.25, 0.29, 0.34 yuan/share), and corresponding PE was 15, 13, and 11X, respectively.
Risk warning: brand operation risk, raw material price fluctuation risk, industry competition risk, etc.