Company discloses June operating data
The Group's monthly revenue was 0.65 billion US dollars, -4.3%; cumulative revenue was 4 billion US dollars, -3.4%; of these, manufacturing business revenue was 2.9% month-on-month, cumulative YoY 2.4%; Baosheng's monthly revenue was -14%, cumulative year-on-year -8.9%;
The Group remains optimistic about the manufacturing business prospects. As the industry gradually recovers and orders become more normalized, we expect to drive continued revenue growth, improve production efficiency and steady profitability.
The Group will actively monitor the development of the situation and allocate its production capacity flexibly to balance demand, order scheduling and labor supply, and promote overall manpower and capacity improvement plans. The Group will continue to enhance its operational resilience, create a highly agile and flexible operating model to improve production efficiency, and at the same time make good use of its core strengths, adjustment capabilities and competitive advantages, supported by cost and expense control to stabilize its profitability. It will also focus on maintaining healthy cash flow and even a stable financial situation.
We continue to work on medium- to long-term capacity layout strategies, including targeting Indonesia and India where labor supply and infrastructure can support sustainable growth, and diversify their manufacturing capacity. The Group will also continue to adhere to the strategy of prioritizing value growth, making good use of sports and leisure trends and its integrated product development practices combining automation technology and R&D capabilities to seek more high-value-added orders and strengthen the product portfolio.
Following a series of precise investments in intelligent automation, the company will continue to implement its long-term digital transformation strategy to achieve excellent operation through digital lean management. It will further integrate manufacturing management systems into OCP to strengthen current ecological intelligence and intelligent manufacturing strategies. As the core of its OCP, the SAP ERP system focuses more on application and automation upgrades, which will strengthen the Group's process reengineering capabilities, improve production efficiency, and create return on investment.
As a powerful management tool, the above measures help to continue to enhance Yuyuan's competitive adjustment capabilities to meet the rapidly changing market and operating environment, including the increasingly flexible needs of brand customers, more efficient production delivery, order fulfillment capabilities, and the ongoing trend of end-to-end capabilities, and the most important ESG-oriented management capabilities.
Raise profit forecasts and maintain “buy” ratings
Yuyuan is the world's largest manufacturer of sports, sports and leisure shoes, casual shoes and outdoor shoes. It has a diverse brand customer portfolio and production base; it has long-term cooperative relationships with international brands such as Nike, Adidas, Asics, New Balance, and Salomon.
Based on 24Q1 performance and Q2 manufacturing business growth and significant month-on-month improvement, we raised our profit forecast.
We expect the company's FY24-26 revenue to be $8.645 billion, $9.645 billion, and $10.935 billion respectively;
Net profit attributable to mother was $0.38 billion, $0.42 billion, and $0.46 billion respectively (the original values were 0.3 billion US dollars, 0.35 billion US dollars, and 0.4 billion US dollars, respectively);
EPS was $0.24 per share, $0.26 per share, and $0.29 per share (the original values were $0.18 per share, $0.22 per share, and $0.25 per share, respectively);
PE is 7x, 6x, and 5x respectively.
Risk warning: The competitive environment in the market enhances risk; legal compliance and corporate governance risks; IT and data security risks; brand customer concentration risks; economic and social environment risks.