Key investment points

Bienleven: Domestic products leave the middle and high-end fashion groups

Bienleven is a scarce locally operated high-end clothing brand. At the beginning of the century, the founder had a unique insight into golf and accurately reached potential middle class users. The company's internal skills in product and channel operations fully leverage the wealth effect, and performance leads the industry. Under the new situation, the company has initially completed the matrix layout of the main brands lifestyle and leisure, golf, sports and leisure, outdoor tourism in Venice, and two newly incubated luxury brands. Combined with deepening internal skills such as core customer maintenance, product fashion and rejuvenation, we are optimistic about the company's growth in the medium term.

Industry comparison: strong barriers to leading golf apparel

The scale of the menswear industry is stabilizing, and the industry pattern is scattered. The 2023 CR5 was only 13%. Bienleven is a leading racetrack golf apparel company in the industry segment. Compared with many polo brands, the company differentiates and positions golf; at the same time, product prices have accurate card positions, high “floor” and “ceiling”, and there are a limited number of comparable brands of the same quality and price. In terms of price comparison brands, the fabric and version of the company's products have advantages; at the same time, the sink channel construction is more mature, and the number of stores in third-tier cities and below accounts for nearly half. On the demand side, the middle class of the company's core customer base has clear characteristics, and the repurchase rate is significantly higher. The overall revenue logic is clearly different from the customer flow logic of traditional stores.

Growth driver: Main brands have broad space to open stores, and new brands can be expected to grow 1) Opening stores: On the demand side, third-tier cities and below are growing faster, and the middle class and above population has room for long-term growth; on the supply side, on the basis of the existing 1,263 stores, we estimate that the company's long-term number of stores is about 1,500 to 2,000, mainly through encryption in high-tier cities and low-tier cities. 2) Expand categories: In recent years, new stores have been opened to display categories such as women's clothing and footwear, driving the increase in connection rates. 3) New brands:

The company acquired two international brands CERRUTI 1881 and Kent & Curwen in June 2023. Among them, Kent & Curwen has opened an offline store in 2024H2, and the brand can be expected to grow.

Profit forecasting, valuation and investment recommendations:

We expect the company's revenue for 2024-2026 to be 3.82/4.66 billion yuan, +7.9%/+11.1% year-on-year, and a 3-year CAGR of 9.6%; net profit to mother of 0.91/1.04/1.2 billion yuan, respectively, +0.3%/+13.6%/+15.4% year-on-year, and a 3-year CAGR of 9.6%. The company has been deeply involved in cultivating high-end brands for many years. Performance has led the industry, and accurate card slots reflect consumer insight. We are optimistic about the company's growth in the medium term. First coverage, giving a “buy” rating.

Risk warning: consumer environment fluctuates; discount control falls short of expectations; channel expansion falls short of expectations; brand operation falls short of expectations