Core views:
The company's e-commerce business grew significantly in 24Q1, and the financial outlook for the 23/24 fiscal year is optimistic. According to data from Jiuqian and Chan's mom, the 24Q1 company's main brand, Bosideng's total sales volume on Tmall, JD, and Douyin was 2,452 billion yuan, up 47.97% year on year, far exceeding the 12.1% increase in online retail sales of physical clothing products nationwide in 24Q1. Among them, Tmall's sales were 829 million yuan, up 37.48% year on year, and JD sales were 356 million yuan, up 67.36% year on year. In the 2022/23 fiscal year, the company's down jackets accounted for 35.65% of online revenue.
The company held the world's first sunscreen show, and sunscreen clothing is expected to become a future growth point. According to Textile and Apparel Weekly, on April 18, Bosideng was invited by the 14th Beijing International Film Festival to host the world's first sunscreen show on the shores of Yanqi Lake at the foot of Yanshan Mountain in Beijing. The entire show was divided into various themes such as “Hot Sun Series”, “Luxury Series”, “Show Style”, “Showcase+Urban Light Outdoor”, and “Girls/Boys Jacket+Lightweight Feather Series”, which showcased different styles of sun protection clothing. According to the company's 2023/24 mid-term report, in the spring and summer of 2023, the Bosideng brand launched a new sunscreen in response to widespread consumer demand. Its trendy style and good sunscreen performance attracted widespread attention and was favored by consumers upon launch. According to Magic Mirror Insight, Bosideng's sunscreen brand ranked first in sales of high-end sunscreen brands on mainstream e-commerce platforms in China throughout 2023. According to the company's official WeChat account, at the 2024 Bosideng Group Annual Conference, the company clarified the dual focus strategy of “focusing on the main channel for down jackets, focusing on the fashion functional technology apparel track”. Fashion functional technology clothing, represented by sunscreen clothing, etc., is expected to become the company's future growth point.
Profit forecasting and investment advice. The company's EPS for fiscal year 23/24-25/26 is expected to be 0.26 yuan/share, 0.31 yuan/share, and 0.37 yuan/share. Referring to comparable companies, the judgment that the company's reasonable value of HK$5.98 per share remained unchanged, corresponding to a price-earnings ratio of about 21 times the 23/24 fiscal year, and maintained a “buy” rating.
Risk warning. Exchange rate fluctuation risk; goodwill impairment risk; operating risk.