Investment Rating - The report gives a "Buy" rating for the company, with a target price of 14.96 HKD as of May 29 [2]. Core Insights - The company is a global leader in the manufacturing of sports and casual footwear, serving major brands like Nike and Adidas. It has seen a revenue decline in 2023 due to inventory destocking by brand clients, but is expected to benefit from a recovery in the industry and improved operational focus on manufacturing [1][5]. - The company has shifted its strategy back to its core manufacturing business, emphasizing OEM and ODM operations, which is expected to enhance profitability as the industry stabilizes [1][31]. - The company anticipates revenue growth from 2024 to 2026, with projected revenues of 82.62 billion, 87.20 billion, and 91.69 billion USD, respectively, and a significant increase in net profit [2][31]. Summary by Sections Company Overview - Founded in 1988, the company has established itself as a leader in the global footwear manufacturing sector, with production bases in China, Indonesia, and Vietnam. It has diversified its client base, including major brands like Nike and Adidas [1][5]. - The company has undergone several strategic phases, including a focus on retail expansion and a recent return to its manufacturing roots [5][11]. Financial Performance - In 2023, the company reported revenues of 7.89 billion USD, a decrease of 12.0% from the previous year. Manufacturing revenue was 5.06 billion USD, down 18.4%, while retail revenue increased by 2.3% to 2.83 billion USD [1][2]. - The company expects to see a recovery in revenues and profits, with net profit projected to grow significantly in the coming years [2][31]. Strategic Focus - The company is focusing on enhancing its manufacturing capabilities, leveraging its strong relationships with key clients, and optimizing its supply chain through vertical integration and horizontal division of labor [1][20][23]. - The management team is stable and experienced, with a focus on returning to core manufacturing operations and improving operational efficiency [21][31]. Market Outlook - The report indicates that the worst phase for the industry is over, with brand sales stabilizing and inventory destocking nearing completion. This is expected to lead to a recovery in demand for manufacturing services [31]. - The company is well-positioned to capture market share as the industry rebounds, with a focus on high-value orders from leading brands [1][31].
裕元集团：深度报告：行业至暗时刻已过，公司聚焦制造业务经营改善显著