The research report from Jianyin International states that it reiterates Shenzhou (02313.HK) as the main beneficiary of international brands' inventory replenishment in the second half of the year, predicting that Shenzhou will achieve an 8% revenue growth in the second half, primarily benefiting from the recovery of Puma's Orders, as well as double-digit Order growth from Adidas, Lululemon (LULU.US), and domestic sports brands. The bank expects that due to product mix improvements, Shenzhou's average selling price decline will narrow from about 6% in the first half of 2024 to 2% to 3% in the second half. In addition, the bank also estimates that the gross margin will expand by 2.9 percentage points year-on-year to 28.7% in the second half, remaining roughly stable compared to the first half.

The bank has lowered the company's Target Price from 107 yuan to 83 yuan, maintaining the rating of "outperforming the market," while reducing its earnings forecast for the company by 3% and 5% for this year and next year respectively, to reflect the slowed expansion of the gross margin. As for next year, the bank expects Order growth to be 11%, and the average selling price is expected to be positive due to rising costs, anticipating a significant expansion of gross margin in the second half of next year, with a full-year profit growth of 13%.