STELLA(1836.HK):A DIVIDEND PLAY RIDING ON THE ATHLEISURE TREND
STELLA(1836.HK):A DIVIDEND PLAY RIDING ON THE ATHLEISURE TREND
2) The popular trend of category expansion by the luxury and high-end fashion brands. Many brands are looking for new growth drivers and category expansion is one of that. In fact, we can tell from the sales mix of the Prada and Gucci brands that their footwear sales were all climbing from FY19 to 9M23. Therefore, as one other best high-end athleisure shoes maker in town, we are confident that Stella can ramp this up further. In the past two years, it has acquired about 17 to 18 clients (e.g. Moncler, Lacoste, Kenzo (under the LVMH group)), and these could provide a boost in orders in FY25E (as the product testing usually last for around 1-2 years for a new client). For example, one of Moncler's lately strategy is to generate around 10% of sales from its footwear business in the mid-term.We think the risk-reward currently for Stella is excellent, because of: 1) a turnaround of the clothing and sportswear sector in the US, 2) the company's specific strengths like its high-end positioning (e.g. producing Jordan series for Nike) and ramp-up of footwear business by luxury brands (acquired 17-18 new clients, like Moncler Lacoste and Kenzo (under LVMH)in the past two years) and 3) undemanding valuation of 8x FY23E P/E and 9% FY23E yield.
我們認爲Stella目前的風險回報非常好，因爲：1) 美國服裝和運動服行業的轉機，2) 該公司的具體優勢，例如其高端定位（例如爲耐克生產喬丹系列）以及奢侈品牌的鞋類業務增長（在過去兩年中收購了17-18個新客戶，例如Moncler Lacoste和Kenzo（LVMH旗下））以及3）估值要求不高 8 倍 FY23E 市盈率和 9% 的 FY23E 收益率。
Company-wise, we expect Stella's growth to accelerate and outperform its peers. We are impressed that Stella not only managed to resume positive sales growth of 13% in 4Q23, but also outperformed peers like Feng Tay (- 3%), Eclat (+10%) and Makalot (+9%). Referring to our NDR call recently, management is still confident on accelerated growth in FY24E (low-teen net profit growth, with 0% to MSD volume and flattish ASP growth), even after a beat in FY23E results. In our view, the general picture in FY24E and FY25E is: 1) sportswear companies to shift from de-stocking to re-stocking, 2) luxury brand sales growth to be soft but price hikes shall continue, and 3) high-end fashion and causal names' growth to slowly pick up but with healthy discounts and inventory levels. And we think Stella can further differentiate itself and deliver an outstanding result, thanks to:
在公司方面，我們預計Stella的增長將加速並跑贏同行。令我們印象深刻的是，Stella不僅在23年第四季度成功恢復了13％的正銷售增長，而且表現還超過了豐泰（-3％）、Eclat（+ 10％）和Makalot（+ 9％）等同行。關於我們最近的 NDR 電話會議，管理層仍然對 FY24E（淨利潤增長率較低，MSD 交易量爲 0%，ASP 增長持平）的加速增長充滿信心，即使 FY23E 業績超過預期。在我們看來，FY24E 和 FY25E 的總體情況是：1) 運動服公司將從缺貨轉向補貨；2) 奢侈品牌的銷售增長疲軟，但價格將繼續上漲；3) 高端時裝和休閒品牌的增長將緩慢回升，但折扣和庫存水平良好。而且我們認爲，Stella可以進一步脫穎而出並取得出色的成績，這要歸功於：
1) Stella's high-end positioning (it is the maker of Jordan athleisure series, as well as many other limited or cross-over collections) and its strategic partnership with Nike. Therefore, it should be able to recover faster during the Nike's turnaround (from de-stocking in FY23E to re-stocking in FY24E), and the U-rate of sports segment factory should increase gradually (80%+ in FY24E and 90%+ in FY25E (close to pre-Covid level). During FY19-23, Jordan brand sales growth was always faster than Nike group's. Moreover, the construction of a new factory (with designed capacity of 10mn pairs of shoes) in Indonesia for Nike (to be opened in early FY26E) is still on track.
1）Stella的高端定位（它是Jordan運動休閒系列以及許多其他限量或跨界系列的製造商）及其與耐克的戰略合作伙伴關係。因此，在耐克的轉型期間（從 FY23E 的缺貨到 FY24E 的補貨），它應該能夠更快地恢復，體育細分市場工廠的U率應該逐步提高（FY24E 爲 80% 以上，FY25E 爲 90% 以上（接近疫情之前的水平）。在 FY19-23 期間，喬丹品牌的銷售增長總是快於耐克集團的銷售增長。此外，耐克在印度尼西亞建造新工廠（設計產能爲一千萬雙鞋）（將於 FY26E 初期開業）仍在按計劃進行。
2) The popular trend of category expansion by the luxury and high-end fashion brands. Many brands are looking for new growth drivers and category expansion is one of that. In fact, we can tell from the sales mix of the Prada and Gucci brands that their footwear sales were all climbing from FY19 to 9M23. Therefore, as one other best high-end athleisure shoes maker in town, we are confident that Stella can ramp this up further. In the past two years, it has acquired about 17 to 18 clients (e.g. Moncler, Lacoste, Kenzo (under the LVMH group)), and these could provide a boost in orders in FY25E (as the product testing usually last for around 1-2 years for a new client). For example, one of Moncler's lately strategy is to generate around 10% of sales from its footwear business in the mid-term.
2）奢侈品和高端時尚品牌擴大品類的流行趨勢。許多品牌都在尋找新的增長動力，品類擴張就是其中之一。實際上，我們可以從Prada和Gucci品牌的銷售組合中看出，從2019財年到2023年9月9日，他們的鞋類銷售額都在攀升。因此，作爲城裏另一家最好的高端運動休閒鞋製造商，我們有信心Stella可以進一步提高這一水平。在過去的兩年中，它已經收購了大約17至18個客戶（例如Moncler、Lacoste、Kenzo（隸屬於LVMH集團）），這可能會增加 FY25E 的訂單（因爲新客戶的產品測試通常持續約1-2年）。例如，Moncler最近的戰略之一是在中期內從其鞋類業務中獲得約10％的銷售額。
譯文內容由第三人軟體翻譯。
