Zhejiang Xinao Textiles (603889) 中邮证券·2025-04-22 03:23Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative increase in stock price of over 20% compared to the benchmark index within six months [6][14]. Core Insights - The company is projected to achieve revenues of 4.84 billion yuan, a net profit attributable to shareholders of 430 million yuan, and a net profit excluding non-recurring items of 410 million yuan for the year 2024, representing year-on-year growth of 9.1%, 6.0%, and 5.2% respectively [3][6]. - The growth in sales is driven by increased volume, particularly in the cashmere business, with significant year-on-year increases in revenue for cashmere yarn [4]. - The company is expanding its production capacity globally, with new projects in Vietnam and Yinchuan set to commence production in 2025, which will enhance its product offerings and market reach [5][6]. Company Overview - The latest closing price of the company's stock is 5.71 yuan, with a total market capitalization of 4.2 billion yuan [2]. - The company has a debt-to-asset ratio of 37.6% and a price-to-earnings ratio of 9.68, indicating a relatively stable financial position [2][5]. - The largest shareholder is Zhejiang Xin'ao Industrial Co., Ltd., which reflects a concentrated ownership structure [2]. Financial Projections - The company’s projected net profits for 2025, 2026, and 2027 are 460 million yuan, 510 million yuan, and 570 million yuan respectively, with corresponding price-to-earnings ratios of 9, 8, and 7 [6][10]. - Revenue growth rates are expected to be 9.07% in 2024, followed by 3.96% in 2025, and then increasing again to 9.46% in 2026 [10][11]. Product Performance - In 2024, the company’s revenue from various product lines includes 2.54 billion yuan from fine wool yarn, 1.55 billion yuan from cashmere yarn, and 670 million yuan from wool tops, with cashmere yarn showing a notable year-on-year growth of 26.7% [4][5]. - The average selling prices for fine wool yarn, cashmere, and wool tops have decreased due to industry price pressures, but the company has maintained resilient sales volumes [4]. Cost Management - The gross margin for the company improved to 19.0% in 2024, with fine wool yarn margins increasing due to better product mix and production efficiency, while cashmere margins faced pressure from depreciation and other costs [5][6]. - The company’s management expenses have increased due to rising employee costs and share-based payment expenses, impacting the net profit margin, which decreased to 9.3% [5]. Strategic Outlook - The company is focusing on expanding its product categories and enhancing its global footprint, particularly in the outdoor sports segment, which is expected to provide significant growth opportunities in the future [5][6]. - The ongoing trade tensions may have short-term impacts on demand, but the company’s cost control and advanced equipment are seen as long-term advantages [6].