嘉乐并表带动表观收入高增。分业务来看，Q3 预计公司主业箱包代工业务在低基数加持下实现近30%增长，核心客户Nike 及迪卡侬均实现较快增长；嘉乐服装代工收入预计增长高单位数，环比增速下滑主要系印尼工厂产能调整所致，后续仍将推动生产效率稳健爬坡；品牌业务预计收入同增双位数，经过调整后重回稳健增长轨道。Incidents:
The company released a report for the third quarter of 2024. As of 2024Q3, the company's revenue increased 32.48% year on year to 3.025 billion yuan, net profit to mother increased 164.63% year on year to 0.321 billion yuan, net profit after deducting non-return to mother increased 63.02% year on year to 0.225 billion yuan; single Q3 revenue increased 64.36% year on year to 1.193 billion yuan, net profit to mother increased 57.52% year on year to 0.072 billion yuan, after deducting non-return to mother Net profit increased 27.05% year over year to 0.066 billion yuan.
Comment:
Carle also led to a high increase in apparent revenue. By business, Q3 expects the company's main luggage foundry business to grow by nearly 30% with support from a low base, with both core customers Nike and Decathlon achieving relatively rapid growth; Jialle Apparel's foundry revenue is expected to grow by a high number of units, and the month-on-month growth rate decline is mainly due to capacity adjustments in Indonesian factories, which will continue to drive a steady decline in production efficiency; the brand business is expected to increase by double digits, and after adjustments, return to a steady growth trajectory.
Carle also stated that gross profit margins were affected, and the exchange rate interfered with net interest rates. 2024Q3's gross margin decreased by 3.2 pct to 22% year on year, mainly due to the merger of the Jia Le apparel business, which has a relatively low gross margin. On the expense side, the sales/management/finance expense ratios remained basically flat at 4.8%/6.2%/1.6% compared to -1.4 pct/-0.7 pct, respectively, and the fee control effect continued to show. As a result, net profit margin fell 0.3 pct to 6.1% year over year. Furthermore, the net interest rate after deducting non-return from mother fell 1.6 pct to 5.6% year on year, mainly due to an increase in the company's forward foreign exchange losses.
Fluctuations in operating conditions were affected by the combination. As of 2024Q3, the company's inventory increased by 96.2% year on year to 0.84 billion yuan, mainly due to the Kara merger. The number of inventory turnover days fell by 1 day to 78 days year on year, and remained stable. The number of turnaround days for accounts receivable/payable increased by 7/4 days to 65/59 days, respectively. As of the end of the reporting period, net cash flow from operating activities was 72.3% to $0.12 billion, mainly due to an increase in procurement of raw materials. At the end of the period, it had monetary capital of 0.76 billion yuan and sufficient capital.
Mid-year dividends were distributed for the first time, focusing on investor returns. The company has drawn up a profit distribution plan for the first three quarters. It plans to distribute a cash dividend of 1.46 yuan for every 10 shares, for a total cash dividend of 34.7 million yuan, with due emphasis on shareholder returns.
Investment advice: As a leading OEM company in the luggage industry, the core luggage OEM business achieved rapid growth in the first half of the year, and strategic adjustments to the brand management business continued to advance. Shanghai Jiale successfully entered the garment OEM business to provide a new growth pole. Net profit due to mother is expected to be 0.38/0.4/0.49 billion yuan in 2024-2026, corresponding to 15/14/12 times the valuation. The first coverage gave it a “buy” rating.
Risk warning: international macroeconomic fluctuations; fluctuations in raw material prices; capacity construction falling short of expectations; profit forecasts and valuations falling short of expectations, etc.
