Investment Rating - Buy (Maintained) with a current price of HKD 64.25 [1] Core Views - The company achieved a significant recovery in profitability in the first half of 2024, with revenue and net profit attributable to shareholders increasing by 12.2% and 37.8% YoY, respectively [5] - The gross margin improved notably by 6.5 percentage points to 29.0%, driven by higher capacity utilization and enhanced production efficiency in overseas factories [5] - The company's net profit margin attributable to shareholders rose by 4.2 percentage points to 22.6%, reflecting high-quality growth [5] - The company's top four clients (Uniqlo, Nike, adidas, Puma) accounted for 79.5% of total revenue, with a combined revenue growth of 11.7% YoY [5] - The company is expanding its overseas production capacity, with new factories in Cambodia and Vietnam, and plans to further increase its fabric production capacity by 50% [6] Financial Performance - Revenue for the first half of 2024 reached RMB 12.98 billion, up 12.2% YoY, while net profit attributable to shareholders was RMB 2.93 billion, up 37.8% YoY [5] - EPS for the first half of 2024 was RMB 1.95, with an interim dividend of HKD 1.25 per share and a payout ratio of 58.3% [5] - The company's operating cash flow decreased by 14.6% YoY to RMB 2.31 billion in the first half of 2024 [5] - The company's net cash assets after deducting borrowings stood at RMB 12.69 billion as of June 2024, indicating strong financial resilience [6] Product and Regional Breakdown - By product category, sportswear/leisurewear/underwear accounted for 71.0%/21.3%/7.0% of total revenue, with YoY growth rates of 7.6%/20.0%/47.4%, respectively [5] - By region, domestic sales accounted for 28.7% of total revenue, growing 20.0% YoY, while overseas markets in Europe/Japan/US/others grew by 4.4%/27.0%/2.7%/7.4% YoY, respectively [5] Future Outlook - The company aims to achieve a sales volume growth target of 15-20% for the full year of 2024 [6] - The company plans to continue expanding its overseas production capacity, with new factories in Cambodia and Indonesia, and further enhance its automation and digital capabilities [6] - The company is expected to maintain strong market share and profitability, with projected EPS of RMB 3.71/4.29/4.90 for 2024/2025/2026, and PE ratios of 16/14/12 times, respectively [6] Valuation and Forecast - The company's revenue is forecasted to grow by 10.5% in 2024, reaching RMB 27.59 billion, with net profit expected to grow by 22.3% to RMB 5.57 billion [7] - The company's ROE is projected to increase from 14.3% in 2023 to 16.4% in 2024, with a further rise to 19.5% by 2026 [7] - The company's P/E ratio is expected to decline from 19x in 2023 to 12x by 2026, reflecting strong earnings growth [7]
申洲国际：2024年中期业绩点评：上半年利润顺利修复，制造龙头扩产提效稳健前行