We think the guidance raise is a key moment for the company, as the success that Bosdieng has achieved in the sun-protective product series shows that it is capable of generating sales in all seasons (other than just fall and winter). Also, despite our raises in estimates and TP, we still think our numbers are conservative. The company is only trading at 12x FY3/25E P/E and a 7% yield, still fairly attractive in our view.

FY3/24E guidance raised, driven by both industry and company reasons. During its new product launch event last week, Bosideng raised its FY24E guidance to 30%+ sales growth and even faster NP growth (from 20%+ in Jan 2024), thanks to macro reasons (CNY was later than last year's and favorable weather since Dec 2023) and various company-specific reasons such as: 1) successful category expansion (e.g., sun-protective achieved 300%+ sales growth to around RMB500mn in FY3/24E), 2) impressive new product launches (e.g. Ultralight down apparel had a surge in sales growth of 70%+ to around RMB3.0bn in FY3/24E, much faster than the guidance of 30%+; the 3-in-1 windbreakers were also extremely hot- selling) and 3) effective boost in store efficiency through the TOP strategy (top 500 stores contributed about 60% of down apparel sales, top 17% SKUs made up around 70% of sales and 180+ stores registered RMB10mn+ in annual sales per store, etc.).

Company is still confident on its rapid growth in FY3/25E and we do think that is feasible. Management is still highly confident about its growth in FY3/25E and even in FY3/26E-27E, and we have conservatively estimated 14% sales growth and 17% net profit growth in FY3/25E. We believe the sales growth from sun-protective clothing series could be explosive (FY25E target is at around RMB1.bn, implying 100%+ sales growth; the YTD sales growth is already at 80%+), as: 1) the company will launch a new City Outdoor Series/ 都市轻户外系列 on top of the already hot-selling Scorching Sun series/ 骄阳系列, 2) products will be placed into more stores (to around 1,500+ direct retail stores, from 1,000+ stores last year and will also sell to the distributor stores), 3) more A&P expenses will be spent around these product series. Moreover, sales of the sun-protective clothing will also help acquire more potential customers for down apparel in the up-coming winter. Similarly, we are also confident on the development of Ultralight down apparel (FY25E target is at around RMB4.5bn, implying 30%+ sales growth, from RMB3.0bn+ last year), thanks to expansion of product series and further upgrades in designs and functionality. Moreover, this kind of products can effective extend sales seasons of Bosideng's products from winter to other seasons during the year.

Maintain BUY and raise TP to HK$5.34. We revise up FY3/24E-26E net profit by 11%-13% to factor in: 1) a beat in sales due to favorable weather, 2) positive reception of many new products and 3) better-than-expected operating leverage. We do think this guidance raise is a key moment for the company, as the success that Bosdieng has achieved in the sun-protective product series shows that it is capable of generating sales in all seasons (other than just fall and winter). So we maintain BUY and raise its TP to HK$5.34, based on 15x FY3/25E P/E (raised and rolled over from 14x FY3/24E P/E). It is trading at 12x FY3/25E P/E, still attractive in our view, vs 18%/ 22% sales/ NP CAGRs and a 5-year average of 16x.