Jingu Finance | Minsheng Securities released research reports, indicating that Yue Yuen Ind (00551) announced unaudited comprehensive performance for the first three quarters of 2024. In 24Q1-Q3, the group achieved revenue of $6.075 billion, up by +1.5% year-on-year, with a gross margin of 24.2%, up by +0.7 percentage points, and net income attributable to shareholders of $0.332 billion, up by +140.9% year-on-year. In particular, in 24Q3, revenue reached $2.06 billion, up by +12.5% year-on-year, with a gross margin of 24.1%, up by +0.6 percentage points, and net income attributable to shareholders of $0.147 billion, up by +172.3% year-on-year.
The bank stated that in the manufacturing business segment, capacity utilization and shipment volume are good, cost control and optimization are driving the improvement of net margin. 1) On the revenue side: In 24Q3, as the global footwear market further normalizes, the demand for footwear products supplied by the group increases significantly, with manufacturing business orders fully loaded driving continued rise in overall capacity utilization and production efficiency, the group's manufacturing business in Q3 operates well, with capacity consistently in high demand, strong growth in footwear shipments, and a gradually narrowing decline in unit prices. In 24Q1-Q3, manufacturing business revenue was $4.136 billion, up by +9.0%, footwear shipments were 0.187 billion pairs, up by +16.2%, with an average selling price of $20.24 per pair, down by -6.8% year-on-year due to the high base effect and changes in product structure. 2) On the gross margin side: In 24Q1-Q3, the capacity utilization rate was 92% (23Q1-Q3 was 76%), and the gross margin for the manufacturing business was 19.6%, up by +1.6 percentage points year-on-year; as the increase in capacity utilization drives the upward trend in gross margin, in 24Q3, the gross margin for the manufacturing business was 20.6%, up by +1.4 percentage points. 3) On the profit side: In 24Q1-Q3, the net income attributable to shareholders of the manufacturing business was $0.302 billion, up by +174.2% year-on-year, with a net margin of 7.30%, up by +4.40 percentage points; in 24Q3, the net income attributable to shareholders of the manufacturing business was $0.147 billion, up by +170.8% year-on-year, with a net margin of 9.76%, up by +5.33 percentage points.
The bank projects that the revenue will reach $8.441 billion, $8.834 billion, $9.256 billion in 2024 to 2026, with a year-on-year increase of +7.0%, +4.7%, +4.8%, achieving net income attributable to shareholders of $0.448 billion, $0.482 billion, $0.535 billion, up by +63.0%, +7.6%, +11.0% respectively. The closing price on November 12 corresponds to PE multiples of 8, 8, 7 times, maintaining a 'recommended' rating.
