Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 93.00, down from the previous target of HKD 96.00 [1][7]. Core Insights - The company is expected to see a significant improvement in orders and performance in the first half of 2024 due to international brand restocking and a low base from the previous year [1][2]. - The company benefits from competitive advantages such as integrated supply chains, international capacity, automation in production, and efficient management, which contribute to its profit elasticity [1][2]. - The forecast for 2024 includes a net profit of RMB 5.73 billion and an EPS of RMB 3.81, while the net profit estimates for 2025 and 2026 have been adjusted to RMB 6.50 billion and RMB 7.30 billion, respectively [1][6]. Order and Capacity Utilization - Orders are expected to grow rapidly in 1H24, particularly from major clients like Adidas and Puma, with new clients like Lululemon also contributing to revenue growth [2]. - The company anticipates a significant improvement in gross margin for 2024, with expected margins of 22.4% in 1H23 and 25.8% in 2H23, indicating a recovery trend [2]. Capacity Expansion and Product Innovation - The company is progressing with its hiring plans at its Ningbo and Vietnam factories, expecting a capacity increase of 10-20% in 2024 [3]. - Long-term capacity expansion will focus on overseas production, with plans for new factories in Indonesia alongside existing bases in Vietnam and Cambodia [3]. - The company is diversifying its product offerings, enhancing market competitiveness and customer loyalty [3].
申洲国际：恢复趋势明确，业绩弹性可期