KORRUN(300577) 太平洋·2024-08-15 00:30Investment Rating - The report gives a "Buy" rating for the company with a target price of 26.1, based on the closing price of 17.72 on August 6, 2024 [1][4]. Core Viewpoints - The company is a leading player in the bag manufacturing industry, leveraging both B2B and B2C business models for growth. It has a strong foundation in bag manufacturing and is expanding into apparel manufacturing, which is expected to drive future growth [2][4]. - The company reported a revenue of 310.5 million and a net profit of 11.6 million in 2023, with year-on-year growth of 13.3% and 110.7% respectively. The first quarter of 2024 showed further growth with revenues of 91 million and net profits of 7.1 million, reflecting a year-on-year increase of 22.9% and 116.4% [2][17]. - The bag industry has significant growth potential, with the luggage market growing by 17% to 31 billion and the bag market by 12% to 203.9 billion in 2023. The projected CAGR for the next five years is 8.9% for luggage and 7.8% for bags [2][27]. Summary by Sections Company Overview - The company has evolved from a bag manufacturing leader to a dual-driven model of bag and apparel manufacturing, supported by a partnership with Xiaomi and the development of its own brands [9]. - The management team has extensive experience in the internet and manufacturing sectors, with significant employee ownership and incentive plans to align interests [9][12]. Bag Industry - The domestic bag market is large and fragmented, with high-end segments dominated by foreign brands. The top 10 brands in the bag sector are all foreign, while the luggage sector has five domestic brands in the top 10 [27][28]. - The retail sector is expected to grow steadily, with the luggage market projected to reach 31 billion and the bag market 203.9 billion by 2023, indicating a healthy growth trajectory [27][28]. B2B Business - The company is focusing on optimizing its customer structure and expanding its overseas production capacity, which is expected to enhance its growth in the bag manufacturing sector [4][9]. - The acquisition of Shanghai Jiale, a key supplier for Uniqlo, is expected to bolster the company's apparel manufacturing capabilities and create synergies with its existing operations [4][9]. B2C Business - The company has established a strong presence in the B2C market through its partnership with Xiaomi and the development of its own brand, 90 Fen, which targets the mid-range market [4][9]. - The B2C segment has shown rapid growth, with a year-on-year increase of 22% in 2023, driven by post-pandemic recovery and increased travel demand [17][22].