The company released 24Q1 financial report
Operating income of 1.1 billion yuan, an increase of 12%; net profit to mother was 96 million yuan, an increase of 6.6%; after deducting non-return to mother of 93 million yuan, an increase of 6.4%;
The gross profit margin for the current period was 19.9%, up 0.6 pct; the net profit margin was 9%, down 0.7 pct.
The global layout is more competitive in the market and resilient to risks
The company's global layout is beginning to show. It has 7 production companies in Zhejiang, Ningxia, Scotland, and Vietnam's Xining province; has many trading companies in Hong Kong, Shanghai, Shenzhen, Zhejiang, and Australia; has a European technology development and sales center in Italy; and has offices and marketing teams in the US, UK, France, Germany, Japan, South Korea, and Northern Europe. The marketing channels cover most domestic provinces and more than 20 countries and regions. The company actively establishes a market system where domestic business and overseas business promote each other, forming complementary advantages and flexible allocation of domestic and foreign production capacity and domestic and foreign sales markets, so that it can maintain stable development in the complex and changing environment of recent years.
High-quality customers are resilient, and outdoor sports tracks are thriving. In recent years, consumption stratification has intensified. Mid-range, high-end and luxury brands have shown the characteristics of strong resilience and rapid recovery due to limited damage to the core customer base, and the outdoor sports boom is relatively good. Leading brands have a complicated and strict certification process for supplier selection, and only a few companies have the ability to enter the high-end market to participate in comprehensive competition. With rich industry experience, good market reputation and strong development and design capabilities, New Australia has become the designated yarn supplier for many high-quality brand customers, forming long-term and stable cooperative relationships with them, and the customer resource barriers are deep.
Adjust profit forecasts to maintain “buy” ratings
New Australia has been deeply involved in wool spinning for more than 30 years. From starting with 1,600 spindles to the current worsted spinning scale of about 130,000 spindles; from a single spinning process to establishing an integrated industrial chain for wool, dyeing and spinning; expanding broadband products from worsted knitwear yarn to wool-spun cashmere, woven yarn, home textiles and industrial yarn; from domestic transformation and upgrading to international production capacity layout, Singapore and Australia continues to grow.
At present, New Australia has become one of the most professional wool-worsted yarn suppliers in the world and the individual champion of combed wool yarn in the domestic manufacturing industry. The company has a complete global marketing network and mature market operation system, has accumulated more than 5,000 customer resources around the world, and has served nearly 500 high-quality global brands. More importantly, through more than 30 years of continuous investment in R&D and innovation, New Australia has mastered first-class core technology and production technology, has the most advanced hardware facilities, and a stronger financial strength and efficient core management team. The company is also more determined and confident to follow the development path of the enterprise.
Based on the 24Q1 performance, we adjusted our profit forecast appropriately, and the revenue forecast remains unchanged. We expect net profit for 24-26 to be $470 million, $540 million, and $620 million respectively (prior values of $4.8, 5.7, and 620 million yuan respectively), corresponding EPS of 0.64, 0.74, and 0.85 yuan/share, respectively, and PE of 11, 10, and 9X, respectively.
Risk warning: macroeconomic risk; risk of wool price fluctuation; risk of cashmere price fluctuation; risk of exchange rate fluctuation; risk of overseas investment, etc.