Key points of investment
FY24's sales performance continues to be impressive. 1) First half fiscal year 24 (2023/04/01 2023/09/30):
Revenue of 7.472 billion yuan/yoy +20.9% and net profit of 919 million yuan/yoy +25.1%, achieving performance growth exceeding the expectations of leading peers in an environment of weak overall domestic consumption. Among them, Bosideng's main brand revenue increased 25.5% year-on-year, reflecting the continued increase in brand market recognition under the company's focus on the main channel and professional leadership; 2) Second half of the fiscal year (2023/10/01/ 2024/03/31): Under refined operation+cold tide catalysis, the sales performance of down jackets during the peak season of 23 was impressive. Tmall The flagship store ranked first in sales of women's clothing, with a year-on-year growth rate of more than 20%.
The company continues to promote the business strategy of improving the efficiency of a single store, enriching products, and improving the brand.
1) In terms of channels, focus on single-store operations, improve quality and efficiency, establish a replicable and efficient single-store operation model, and improve store operating indicators. In terms of directly-managed stores, the focus is on building TOP benchmark stores. The average store efficiency of 102 newly opened TOP stores exceeds 9 million yuan, and the number of 10-million-level stores has reached 185, and the overall operating quality of TOP stores continues to improve. In terms of the franchise market, the company is committed to optimizing the franchise ratio, upgrading the franchisee business model, improving the management system, tapping the potential of franchisees in the sinking market, and reaching cooperative agreements with franchisees.
2) In terms of products, focus on customer needs, enrich the product portfolio, and create performance growth. Different seasons promote different categories. Spring and summer focus on sunscreen clothing, after 618, focus on jackets, and winter after October enter a golden period of sales in traditional down jacket categories. Among them: ① In terms of sunscreen clothing, the company has launched a sunscreen category in recent years and continues to pay attention to it. FY24's sunscreen revenue has increased by more than 300% year on year, and sales have increased 85% year on year since this year, making it the first domestic company to focus on large-scale batch management of sunscreen clothing; ② Lightweight down jackets continued to develop. The company expects to increase investment in the lightweight down jacket category in 24, with a target sales volume (tax included) of 4.5 billion yuan in 24 years; ③ The extreme cold series has developed very mature and will continue to drive the development of the high-end outdoor sector in the future.
3) On the brand side, brand building has continued to be strengthened. Bosideng's brand value was 88.569 billion yuan in '23 (according to the 2023 “China 500 Most Valuable Brands” analysis report). It first entered the world's top 500 brands, and the company's ESG rating remained A.
Profit forecast and investment rating: The company is a leading high-end down jacket in China. Under the continuous promotion of single-store efficiency, product enrichment, and brand enhancement business strategy, terminal sales performance continues to be beautiful. In 2024, the company will continue to promote single-store efficiency improvement, product quality and richness, and strengthen close ties between brands and consumers. Considering that terminal sales exceeded expectations, we further raised FY24-26 net profit from 27.1/31.0/3.56 billion yuan to 28.9/33.4/3.87 billion yuan, corresponding to PE15/13/11X.
The company's dividend rate has exceeded 80% for the past two consecutive fiscal years. The undervaluation and high dividend attributes stand out, and maintain a “buy” rating.
Risk warning: Weak economy and climate affect down jacket sales.