Jinwu Financial News | Jianyin International released a Research Report, stating that Adidas's Q4 performance for the 2024 fiscal year exceeded expectations, with revenue increasing 11% year-on-year to 23.683 billion euros, and operating profit grew by over 1 billion euros to reach 1.337 billion euros, driving the quarterly revenue up 24% year-on-year to 5.965 billion euros, with operating profit reversing from a loss of 0.377 billion euros in Q4 2023 to a profit of 57 million euros.

As Adidas accounts for about 20% of Shenzhou International Group Holdings Limited Unsponsored ADR (02313) revenue, its strong performance signals an enhancement in brand strength and product competitiveness, which will increase order volumes for Shenzhou International in the 2025 fiscal year. At the same time, the growth in order volumes from brands such as Lululemon, Puma, and Uniqlo supports Jianyin International's forecast of an 11% growth in orders for Shenzhou International in the 2025 fiscal year. The expected order growth will gradually alleviate the recent wage pressure, leading to a significant expansion of gross margin in the second half of the 2025 fiscal year and a 13% increase in annual profits.

Based on this, the firm maintains its earnings forecast for Shenzhou International unchanged. It is expected that from the 2024 to 2026 fiscal years, Shenzhou International will have a compound annual growth rate (CAGR) in revenue of 11% and a CAGR in core profit of 20%. The profit forecast indicates that the expected revenues for the 2024-2026 fiscal years are 27.469 billion yuan, 31.005 billion yuan, and 34.159 billion yuan respectively; net income is expected to be 5.86 billion yuan, 6.628 billion yuan, and 7.354 billion yuan respectively. Based on an 18 times PE for the 2025 fiscal year for valuation, the target price is maintained at 83.00 HKD. From historical data, Shenzhou International's rolling 12-month PE has fluctuated over different time periods, with a 1-year average of 15.6 times, 3-year average of 23.5 times, 5-year average of 34.1 times, and 10-year average of 27.5 times. The rating is maintained at "Outperform Market."