Financial Performance - For the fiscal year ending December 31, 2024, total sales reached approximately RMB 28,662,938,000, representing an increase of about 14.8% compared to the previous year[3]. - The net profit after tax for the fiscal year was approximately RMB 6,240,581,000, reflecting a significant increase of about 36.9% compared to the previous year[4]. - The group's profit before tax for 2024 was RMB 7,163,778, an increase from RMB 4,995,501 in 2023, representing a growth of approximately 43.5%[29]. - The total income tax expense for 2024 was RMB 923,197, compared to RMB 438,238 in 2023, indicating a significant increase of about 110.8%[29]. - The company's gross profit margin improved by 3.8 percentage points to 28.1% compared to the previous year[51]. - Gross profit amounted to approximately RMB 8,054,897,000, representing a year-on-year increase of about 32.9%[51]. Sales Breakdown - Sales of sports products accounted for approximately 69.1% of total sales, with a year-over-year increase of about 9.8%, driven by rising demand in the mainland China and US markets[3]. - Sales of leisure products represented approximately 25.1% of total sales, showing a significant increase of about 27.1%, primarily due to increased demand in Japan and other markets[3]. - Sales of lingerie products accounted for approximately 5.0% of total sales, with a notable increase of about 34.6%, attributed to strong demand in the Japanese market[4]. - Revenue from mainland China was RMB 8,061,175 thousand in 2024, up 12.9% from RMB 7,124,052 thousand in 2023[17]. - The sales revenue from the Japanese market increased by approximately RMB 1,158,572,000 or 31.5%, reaching RMB 4,834,111,000, driven by demand for leisure and lingerie products[61]. - The sales revenue from the US market rose by approximately RMB 731,839,000 or 18.9%, totaling RMB 4,611,826,000, primarily due to increased demand for sports apparel[62]. Assets and Liabilities - Total current assets increased to RMB 38,571,785,000 from RMB 28,479,488,000 in the previous year[9]. - Total liabilities increased, with current liabilities amounting to RMB 16,826,163,000 compared to RMB 13,384,483,000 in the previous year[11]. - The company's net assets rose to RMB 35,852,895,000 from RMB 32,867,316,000 in the previous year[11]. - Accounts receivable and notes increased to RMB 6,151,331,000, up from RMB 5,023,635,000 in the previous year[41]. - The company's accounts payable increased to RMB 1,493,021,000 from RMB 1,198,212,000 in the previous year[45]. - The net borrowing amount (bank borrowings minus cash and cash equivalents) increased to approximately RMB 1,949,734,000 in 2024 from RMB 507,515,000 in 2023, reflecting an increase of about RMB 1,442,219,000[67]. Dividends - The proposed final dividend is HKD 1.28 per share, leading to a total proposed dividend of HKD 2.53 per share for the fiscal year, an increase of about 24.6% from HKD 2.03 per share in the previous year[4]. - The proposed final dividend per ordinary share for 2024 is HKD 1.28, up from HKD 1.08 in 2023, representing an increase of approximately 18.5%[32]. - The board proposed a final dividend of HKD 1.28 per share, equivalent to approximately RMB 1.19, subject to shareholder approval[87]. Operational Efficiency - The company has enhanced new product development and diversified product categories to meet market demands[52]. - The company’s production capacity utilization has returned to normal levels, with increased employee numbers and improved production efficiency[51]. - The group aims to enhance production efficiency and optimize overseas production capacity while responding to market demand changes flexibly[82]. - The group plans to focus on automation and artificial intelligence applications in production to improve efficiency and reduce costs[83]. Employee and Costs - Employee benefits expenses totaled RMB 7,921,720 in 2024, compared to RMB 6,982,131 in 2023, marking an increase of about 13.4%[24]. - The company employed approximately 102,690 employees as of December 31, 2024, compared to 92,030 in 2023, with total employee costs accounting for about 27.6% of sales[72]. - Capital expenditures for property, plant, and equipment totaled approximately RMB 1,708,473,000, with about 46% allocated for purchasing production equipment and 49% for constructing and purchasing new factory buildings[73]. Governance and Compliance - The company aims to enhance corporate governance and transparency, adopting its own corporate governance code since October 9, 2005, and has complied with all provisions of the code for the year ending December 31, 2024[91]. - The board of directors includes at least three independent non-executive directors, with one possessing appropriate professional qualifications, in compliance with listing rules[95]. - The audit committee, established on October 9, 2005, consists of four independent non-executive directors and is responsible for reviewing the group's financial practices and internal controls[106]. - The company has adopted a shareholder communication policy to ensure that shareholder views and concerns are addressed appropriately[97]. Future Outlook - The group anticipates challenges in the global economic recovery, with trade growth facing difficulties and geopolitical uncertainties affecting commodity price fluctuations[80]. - For 2025, the group expects to maintain a high overall capacity utilization rate and gradually release new capacity from overseas bases[84]. - The group emphasizes the importance of new material research and development, aiming to diversify product categories and enhance market demand[82].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 75.2 HKD, indicating a potential upside of 32.4% from the current price of 56.8 HKD [4][7][21]. Core Insights - The company benefits from a strong order flow due to the recovery in market demand, particularly in sportswear and leisure apparel, which is expected to continue into 2025 [4][5][18]. - The textile manufacturing industry is experiencing a recovery, with stable performance from downstream brands, which supports the company's growth prospects [5][18]. - The company's internationalization strategy is progressing well, with an increasing proportion of overseas production capacity, which is expected to enhance operational efficiency and profitability [6][19]. Financial Performance - For the first half of 2024, the company reported a revenue of 129.75 billion RMB, a year-on-year increase of 12.2%, with a gross profit of 37.61 billion RMB, reflecting a 45.0% increase [10][18]. - The gross margin for the first half of 2024 was 29.0%, up 6.6 percentage points year-on-year, while the net profit margin was 22.6%, an increase of 4.2 percentage points [10][18]. - Revenue by business type showed double-digit growth in leisure and underwear segments, while sportswear recorded a high single-digit growth [11]. Market Dynamics - The company is positioned to benefit from the ongoing demand for sports health and the trend of brands increasing their procurement from key suppliers due to supply chain risks [4][18]. - The recovery in the textile manufacturing sector is reflected in the performance of peer companies, indicating a positive industry trend [5][16]. - The company has a strong customer base, with major clients contributing significantly to its revenue, and it is expected to continue securing orders from high-growth brands [20]. Future Projections - The company is projected to achieve revenues of 276.1 billion RMB, 307.1 billion RMB, and 335.3 billion RMB for FY24E, FY25E, and FY26E, respectively, with year-on-year growth rates of 10.6%, 11.2%, and 9.2% [7][21]. - Net profits are expected to reach 57.6 billion RMB, 65.1 billion RMB, and 73.5 billion RMB for the same periods, with growth rates of 26.3%, 13.1%, and 12.8% [7][21].

Core Viewpoint - Macquarie's latest research report indicates that Uniqlo and adidas are expected to be the main drivers of order growth for Shenzhou International, with gross margins likely to improve further [1] Group 1: Company Performance - Shenzhou International's net profit forecasts for the fiscal years 2024 and 2025 have been downgraded due to a decline in gross margins [1] - The target price for Shenzhou International has been reduced from HKD 97.4 to HKD 92.6, while maintaining an "outperform" rating [1] Group 2: Industry Trends - Nike's revenue is expected to achieve positive growth in the second half of the year, with an increase in product average prices [1]

Investment Rating - The report gives a "Recommend" rating to Shenzhou International (2313 HK) [189] Core Views - Shenzhou International is a global leader in knitted manufacturing with strong innovation R&D vertical integration and early globalization positioning it as a stable leader with upward growth potential [189] - The company is expected to achieve net profits of 5 701 6 530 and 7 410 billion yuan in 2024-2026 with year-on-year growth rates of 25 1% 14 5% and 13 5% respectively [189] - The PE ratios for 2024-2026 are 15x 13x and 12x respectively indicating a valuation advantage compared to peers [189] Financial Performance - In 2023 Shenzhou International achieved revenue of 24 970 million yuan a year-on-year decrease of 10 1% and net profit of 4 557 million yuan a year-on-year decrease of 0 1% [94] - The company's revenue is expected to grow to 27 980 31 172 and 34 399 million yuan in 2024-2026 with year-on-year growth rates of 12 1% 11 4% and 10 4% respectively [94] - The gross margin is expected to gradually increase to 28 4% 28 7% and 29 1% in 2024-2026 driven by improved capacity utilization and overseas expansion [186] Product and Market Analysis - Sportswear is the main driver of revenue growth with sales expected to reach 19 530 21 896 and 24 300 million yuan in 2024-2026 [16] - The European market showed growth with revenue increasing from 3 890 million yuan in 2019 to 5 027 million yuan in 2023 accounting for 20 13% of total revenue [96] - The company has diversified its customer base with major clients including Nike Uniqlo Adidas and Puma [30] Industry Trends - The global sportswear market is expected to grow from 1 92 trillion USD in 2024 to 2 35 trillion USD in 2028 with a CAGR of 4 20% [106] - The top five global sportswear brands (Nike Adidas Puma Skechers and Lululemon) accounted for 31 2% of the market in 2023 with Nike leading at 15 8% [105] - The global sportswear manufacturing market grew from 85 53 billion USD in 2009 to 158 26 billion USD in 2023 with a CAGR of 4 2% [171] Competitive Advantages - Shenzhou International has a strong R&D capability with 767 patent applications and 505 authorized patents by the end of 2022 [18] - The company has a vertical integration model that shortens production and delivery cycles making it highly favored by brand customers [19] - Shenzhou International has established dedicated factories for major clients like Nike Puma Adidas and Uniqlo ensuring independence and confidentiality in production [137] Future Outlook - The company is expected to benefit from the increasing concentration of suppliers to leading brands with Adidas and Nike reducing their number of manufacturing partners [146] - Shenzhou International has expanded its cooperation with new brands like FILA Lululemon and Lacoste which are expected to drive future growth [183] - The company is actively promoting automation and digitalization in its production processes to improve efficiency and reduce costs [166]

Investment Rating - The report maintains a "Buy" rating for Shenzhou International (02313 HK) [5][6] Core Views - Shenzhou International is expected to achieve 10%+ revenue growth in 2024 and 2025, driven by stable order growth and capacity expansion [5] - The company's gross margin is expected to continue improving in H2 2024, following a 6 6pct year-over-year increase to 29 0% in H1 2024 [2] - Net profit is projected to grow 27% in 2024, followed by 13% growth in both 2025 and 2026 [5] Revenue and Profit Analysis - H2 2024 revenue is estimated to grow 10%-20% year-over-year, with shipment volume expected to increase by 15%+ [2] - The company's gross margin improved significantly from 22 4% in H1 2023 to 29 0% in H1 2024 [2] - 2024 full-year revenue is expected to grow 10%+, with net profit projected to reach 5 8 billion yuan [5] Order and Customer Analysis - Major customers include Adidas, Uniqlo, Nike, and PUMA, with Adidas and Uniqlo expected to show strong order performance in 2025 [3] - In H1 2024, sales to top four customers accounted for 79% of total revenue, with Adidas sales growing 34% year-over-year [3] - Sportswear category accounted for 71% of H1 2024 sales, showing 8% year-over-year growth [3] Capacity and Production - The company is actively expanding overseas capacity, with Cambodia and Vietnam factories contributing 53% of total output in 2023 [4] - Cambodia's new garment factory reached its planned workforce of 18,000 employees in H1 2024 [4] - The company acquired a Vietnam factory to enhance fabric supply capabilities [4] Financial Projections - 2024-2026 net profit is projected to be 5 8 billion, 6 55 billion, and 7 39 billion yuan respectively [5] - The current price implies a 2025 PE ratio of 12x [5] - EPS is expected to grow from 3 04 yuan in 2024 to 4 91 yuan in 2026 [11] Industry Position - Shenzhou International is the world's largest vertically integrated garment manufacturer [5] - The company maintains strong partnerships with international brands and continues to enhance its competitive advantage through capacity expansion and efficiency improvements [5]

Investment Rating - The report assigns a "Buy" rating for the company, Shenzhou International, as it is a leading player in the global sportswear manufacturing industry [2][43][44] Core Insights - Shenzhou International has a strong competitive advantage due to its long-standing relationships with high-quality clients, mature manufacturing technology, and diversified production capacity [2][4][44] - The company is expected to benefit from the ongoing recovery in the global sportswear market, with significant growth potential driven by overseas replenishment and expansion of production capacity [2][4][44] - The report forecasts that the company's net profit will grow from 5.785 billion RMB in 2024 to 7.488 billion RMB in 2026, representing year-on-year growth rates of 26.93%, 14.57%, and 12.98% respectively [2][4][42] Summary by Sections 1. Company Overview - Shenzhou International, established in 1988, has developed a robust client base and is a key supplier for major brands like Uniqlo, Nike, and Adidas [9] - The company has a production capacity exceeding 25 million tons of fabric and 550 million garments annually, with a workforce of approximately 97,000 employees [9] 2. Client Demand and Market Trends - The global sportswear market is experiencing growth, particularly in emerging markets, which is expected to continue [15] - The report highlights that the replenishment cycle for inventory among downstream brands is contributing positively to order volumes [15] 3. Competitive Advantages - Shenzhou International's scale and efficiency place it at the forefront of the industry, with high employee productivity and a strong return on equity (ROE) [2][4][25] - The company has maintained a stable gross margin and net profit margin, indicating effective cost management [12][28] 4. Financial Projections - Revenue is projected to increase from 27.954 billion RMB in 2024 to 34.665 billion RMB in 2026, with corresponding growth rates of 11.94%, 11.80%, and 10.90% [42][41] - The report anticipates that the company's sales and management expense ratios will improve, further enhancing profitability [41][39] 5. Valuation Comparison - Shenzhou International's price-to-earnings (P/E) ratio for 2024 is estimated at 15.7x, which is lower than the average P/E of comparable companies at 21.3x, indicating a favorable valuation [2][44]

申洲國際集團控股有限公司* 股份編號: 2313 � � 中 期 報 " 僅 供 鐵 別 目錄 公司資料 2 | --- | |--------------------------| | | | 二零二四年中期業績摘要 | | 管理層討論及分析 | | 中期簡明綜合損益表 | | 中期簡明綜合全面收益表 | | 中期簡明綜合財務狀況表 | | 中期簡明綜合權益變動表 | | 中期簡明綜合現金流量表 | | 中期簡明綜合財務報表附註 | | 其他資料 | 4 5 15 16 17 19 20 23 42 c 公司資料 | --- | --- | |-----------------------------------------------|-------------------------------| | | | | 註冊名稱 | 董事會主要委員會 | | Shenzhou International Group Holdings Limited | 審核委員會 | | 中文名稱 | 王飛絨女士 （主席） | | | 張炳生先生 | | 申洲國際集團控股有限公司 | 劉春紅女士 | | 董事會 | 劉興高先 ...

Investment Rating - No explicit investment rating provided in the report [4] Core Views - Shenzhou International's revenue grew by 12.2% YoY in H1 2024, with net profit attributable to shareholders increasing by 37.8% YoY [1] - Gross margin improved significantly by 6.6 percentage points YoY, exceeding expectations [1][3] - Overseas capacity expansion and efficiency improvements are expected to drive further performance growth [1][3] Revenue Breakdown By Product Category - Sportswear revenue increased by 7.6% YoY to RMB 9.213 billion, accounting for 71% of total revenue, driven by rising demand in mainland China [2][6] - Casualwear revenue grew by 20% YoY to RMB 2.761 billion, accounting for 21.3% of total revenue, supported by demand from Japan, Europe, and other markets [2][6] - Underwear revenue surged by 47.4% YoY to RMB 903 million, accounting for 7% of total revenue, primarily due to increased demand in Japan [2][6] - Other knitwear revenue increased by 12.2% YoY to RMB 100 million, accounting for 0.8% of total revenue [2][6] By Region - China market revenue grew by 20% YoY to RMB 3.72 billion, accounting for 28.7% of total revenue, driven by sportswear demand [2][7] - Europe market revenue increased by 4.4% YoY to RMB 2.527 billion, accounting for 19.5% of total revenue, supported by casualwear orders [2][7] - Japan market revenue rose by 27% YoY to RMB 2.12 billion, accounting for 16.3% of total revenue, driven by casualwear and underwear demand [2][7] - US market revenue grew by 2.7% YoY to RMB 1.88 billion, accounting for 14.5% of total revenue, supported by sportswear orders [2][7] - Other markets revenue increased by 7.4% YoY to RMB 2.73 billion, accounting for 21% of total revenue, driven by casualwear demand in South Korea, Australia, and Southeast Asia [2][7] By Key Clients - Top four clients (Uniqlo, Nike, Adidas, Puma) contributed 79.5% of total revenue, with a YoY growth of 11.7% [2][7] - Uniqlo became the top contributor with revenue of RMB 3.4 billion (+33.8% YoY), driven by casualwear and underwear orders [2][7] - Nike revenue declined by 6.5% YoY to RMB 3.24 billion due to price reductions, though volume grew by 1-2% [2][7] - Adidas revenue increased by 23.8% YoY to RMB 2.33 billion, while Puma revenue remained stable at RMB 1.34 billion [2][7] - Domestic clients (Li-Ning, Anta, Xtep) accounted for 11.2% of total revenue, up 0.4 percentage points YoY [2][7] - Lululemon revenue grew by over 60% YoY, and the company added a new client, LACOSTE [2][7] Profitability and Margins - Gross margin reached 29% in H1 2024, up 6.6 percentage points YoY, driven by improved capacity utilization and overseas factory efficiency [3][8] - Net profit margin attributable to shareholders was 22.6%, up 4.2 percentage points YoY [3][8] - Core profit, excluding government subsidies and exchange gains, increased by 61.1% YoY to RMB 2.76 billion [3][8] Overseas Capacity Expansion - Vietnam's new factory increased fabric capacity from 400 tons/day to 600 tons/day [3][10] - A new factory in Cambodia with 12,000 employees is under construction and expected to partially operate by 2025 [3][10] - Total employee count reached 102,000 in H1 2024, with 10,000 new hires, including 2,200 in Vietnam and 18,000 in Cambodia [10] Dividend Policy - The company maintains a stable dividend payout ratio of 50-60%, with an interim dividend of HKD 1.25 per share, representing a payout ratio of 58.5% [9] Inventory and Raw Materials - Inventory turnover days remained stable at 127 days in H1 2024, with higher inventory levels in the first half due to pre-stocking for future production [9] - The company's main raw material is cotton yarn, with inventory levels reflecting raw material stock [9]

Investment Rating - Buy (maintained) [1] Core Views - Strong profit growth driven by order recovery in H1 2024 [2] - Revenue increased by 12.2% YoY to RMB 12.976 billion, with net profit attributable to shareholders rising by 37.8% YoY to RMB 2.931 billion [2] - Sales net margin improved to 22.6%, up 4.2 percentage points YoY, and gross margin increased to 29.0%, up 6.6 percentage points YoY [2] - Significant growth in domestic and Japanese markets, with domestic revenue up 20.0% and Japanese revenue up 27.0% [2] - The company's market share among major clients has further increased, particularly in the domestic and Japanese markets [2] Business Breakdown By Product Category - Sportswear: RMB 9.213 billion, up 7.6%, accounting for 71.0% of total revenue [2] - Casualwear: RMB 2.761 billion, up 20.0%, accounting for 19.9% of total revenue [2] - Underwear: RMB 903 million, up 47.4%, accounting for 7.0% of total revenue [2] - Other knitwear: RMB 99.5 million, up 12.2%, accounting for 0.7% of total revenue [2] By Region - Europe: RMB 2.527 billion, up 4.4%, accounting for 19.5% of total revenue [2] - USA: RMB 1.881 billion, up 2.7%, accounting for 14.5% of total revenue [2] - Japan: RMB 2.116 billion, up 27.0%, accounting for 16.3% of total revenue [2] - Other markets: RMB 2.728 billion, up 7.4%, accounting for 21.0% of total revenue [2] - Domestic market: RMB 3.724 billion, up 20.0%, accounting for 28.7% of total revenue [2] Operational Highlights - Improved capacity utilization and increased efficiency in overseas factories contributed to the significant improvement in gross margin [3] - Sales/management/financial expense ratios were 0.7%/7.3%/1.5%, with management expenses decreasing by 0.6 percentage points YoY [3] - Operating cash flow was RMB 2.310 billion, down 14.6% YoY, with cash and cash equivalents at RMB 10.082 billion, down RMB 1.514 billion from the end of 2023 [3] Future Outlook - Revenue is expected to grow by 11%/12%/12% in 2024/2025/2026, reaching RMB 27.641 billion, RMB 31.045 billion, and RMB 34.701 billion respectively [5] - Net profit attributable to shareholders is projected to grow by 29%/14%/12% in 2024/2025/2026, reaching RMB 5.863 billion, RMB 6.672 billion, and RMB 7.444 billion respectively [5] - The company plans to expand overseas production capacity, particularly in Vietnam, and enhance employee incentives and talent development programs [5] Valuation - As of August 30, 2024, the stock price was HKD 64.40, with a P/E ratio of 15/13/12X for 2024/2025/2026 [5] - The company's ROE is expected to be 15.4%/15.1%/14.6% in 2024/2025/2026, with a gross margin of 29.2%/29.5%/30.2% [6]

Investment Rating - The report maintains a "Buy" rating for the company with a target price set at 64.4 HKD [7] Core Insights - The company reported a revenue of 12.2% growth year-on-year in 24H1, reaching 12.98 billion RMB, driven by increased market share among major clients and significant demand growth in mainland China and Japan [1] - The net profit attributable to shareholders increased by 37.8% year-on-year to 2.93 billion RMB, primarily due to higher capacity utilization and the expansion of overseas factories [1] - The company declared an interim dividend of 1.25 HKD per share, a 31.6% increase year-on-year, totaling approximately 1.71 billion RMB, which represents 58.5% of the net profit for 24H1 [1] Revenue Breakdown - Revenue from major clients shows significant variation: Client A contributed 3.4 billion RMB (34% growth), Client B 3.2 billion RMB (6% decline), Client C 2.3 billion RMB (24% growth), and Client D 1.3 billion RMB (stable) [2] - By product category, sportswear revenue was 9.21 billion RMB (8% growth), leisurewear 2.76 billion RMB (20% growth), underwear 0.9 billion RMB (47% growth), and other knitted products nearly 0.1 billion RMB (12% growth) [2] - Geographically, revenue from mainland China was 3.7 billion RMB (20% growth), EU 2.5 billion RMB (4% growth), Japan 2.1 billion RMB (27% growth), and the US 1.9 billion RMB (3% growth) [2] Profitability Metrics - The company's gross margin improved to 29%, an increase of 6.6 percentage points, while the net profit margin rose to 22.6%, up by 4.2 percentage points [3] - Selling and distribution expenses remained stable at 0.7% of revenue, while administrative expenses decreased by 0.6 percentage points to 7.3% of revenue [3] Capacity Expansion and Workforce - As of the end of 24H1, the company employed 18,000 staff at its new garment factory in Cambodia, with ongoing improvements in production efficiency [4] - The company is actively recruiting, having added approximately 2,200 employees at its Vietnam factory in the first half of the year [4] - The company is expanding its capacity in Vietnam and has acquired full ownership of a subsidiary in Vietnam to enhance fabric production capacity [4] Financial Forecast - The company expects continued growth in the second half of the year, with capacity utilization projected to remain at ideal levels [5] - Revenue forecasts for 2024-2026 are 28.76 billion RMB, 32.98 billion RMB, and 37.70 billion RMB, with net profits of 5.62 billion RMB, 6.51 billion RMB, and 7.32 billion RMB respectively [5]