CITIC issued a research report pointing out that Jenny Virgin (02199) benefited from the market recovery in the first half of the fiscal year, the company's performance grew steadily and profitability continued to improve. The core categories such as lingerie, sports and consumer electronics continue to grow, and the company continues to consolidate the advantages of process innovation and production scale to actively respond to the follow-up macro challenges.

The bank pointed out that the company's Vietnam factory capacity efficiency continues to climb, labor costs continue to cut, the company now has the world's leading and largest seamless bonding technology, injection mold cups and other production bases, at the same time retain the flexibility of the domestic Zhaoqing production base relocation schedule, carefully evaluate the fixed asset investment plan. In April, the company formally established a joint venture with Victoria's Secret China to better meet the needs of Chinese consumers in product research and development. Innovative products such as anti-gravity bras, two-size jelly bar vests and magic pants were welcomed by consumers, while focusing on breaking through e-commerce channels. Sales on Tmall and Douyin platforms are growing rapidly and are expected to break even in fiscal year 2024.

Taking into account the impact of inflation and inventory pressure on the company's major brand customers in Europe and the United States in the second half of the fiscal year, the pressure on the growth of orders, and the increase in the company's financial costs in the context of interest rate hikes, the bank lowered its earnings per share forecast for the 2023-25 fiscal year to HK $0.32, 0.48, 0.54 (HK $0.59), taking into account the company's leading position in the lingerie manufacturing industry, as well as the advantages of technology and production scale. Give the company a price-to-earnings ratio of 14 times for fiscal 2023, corresponding to the target price of HK $5, and maintain a "buy" rating.