Brand Portfolio and Market Strategy - Jiangnan Buyi's brand portfolio includes multiple brands across different stages, such as the mature brand JNBY and three growth brands: Sketch, jnby by JNBY, and LESS, along with emerging brands like POMME DE TERRE and onmygame, enhancing market segmentation [5]. - The company has established a multi-channel interactive platform consisting of physical retail stores, online platforms, and WeChat-based social media marketing, crucial for attracting and converting potential fans into loyal customers [10]. - In 2024, Jiangnan Buyi expanded its brand matrix by acquiring the children's clothing brand onmygame, further diversifying its offerings to cater to a broader age demographic [10]. - The company plans to continue focusing on design-driven strategies and multi-brand development to enhance market presence and brand strength [16]. - The company plans to enhance its brand power and optimize its designer brand portfolio to drive sustainable long-term growth [19]. - The company aims to expand its retail network and improve its smart supply chain capabilities to create value-added services for its fans [19]. - The company has implemented a multi-brand strategy to attract different consumer segments, with each brand catering to specific preferences [50]. Financial Performance - Revenue for the fiscal year ending June 30, 2024, reached RMB 5,238,149 thousand, a 17.3% increase from RMB 4,465,124 thousand in the previous year [12]. - Gross profit increased to RMB 3,470,485 thousand, reflecting a 19.0% growth compared to RMB 2,916,992 thousand in the prior year [12]. - Operating profit rose by 39.2% to RMB 1,194,266 thousand from RMB 857,898 thousand year-over-year [12]. - Net profit for the year was RMB 848,139 thousand, a 36.5% increase from RMB 621,283 thousand in the previous year [12]. - The company achieved a net cash flow from operating activities of RMB 1,602,967 thousand, up 70.7% from RMB 939,119 thousand [12]. - The gross margin improved to 66.3%, up from 65.3% in the previous year, indicating enhanced profitability [12]. - The company reported a net profit margin of 16.2%, an increase from 13.9% year-over-year [12]. - The group's profit before tax increased from RMB 850.8 million in fiscal year 2023 to RMB 1,213.1 million in fiscal year 2024, reflecting a growth of 42.6% [33]. Retail and Sales Performance - The number of independent retail stores increased from 1,990 to 2,024, with a total of 924 stores under the mature brand JNBY and 1,043 stores under growth brands [20]. - Comparable store sales for physical retail locations grew by 10.7% in fiscal year 2024, driven by store image upgrades and the introduction of new consumer scenarios [25]. - Active membership accounts increased to over 550,000, up from nearly 510,000 in the previous fiscal year, contributing over 80% of total retail sales [25]. - The number of member accounts with annual purchases exceeding RMB 5,000 rose to over 310,000, with total retail sales from these members reaching RMB 4.49 billion, up from RMB 3.54 billion [25]. - Online sales revenue grew by 18.4% to RMB 1,008.4 million, while offline sales revenue increased by 17.1% to RMB 4,229.7 million [29]. Operational Efficiency and Management - Inventory turnover days decreased to 155.9 days from 190.9 days, indicating improved inventory management [13]. - The debt-to-asset ratio improved to 49.4% from 51.3%, reflecting a stronger financial position [13]. - The company plans to continuously upgrade its information technology systems to support ongoing operational and business growth [54]. - The company emphasizes the importance of its information technology systems for operational efficiency, integrating various management systems to analyze operational data in real-time [54]. - The company has established a robust risk management and internal control system to ensure asset safety and protect shareholder interests, with an annual review of its effectiveness [120]. Sustainability and ESG Initiatives - The company is committed to integrating Environmental, Social, and Governance (ESG) practices into its corporate governance framework, with a goal to achieve its 2025 ESG commitments [35]. - The proportion of sustainable raw materials in total raw material procurement reached 22.4% as of the fiscal year 2024, with a target of 30% by the end of fiscal year 2025 [135]. - The company achieved a 139.2% year-on-year increase in the recycling and utilization of inventory fabrics, totaling 189,000 meters [140]. - The company has integrated ESG factors into its business strategy, establishing an ESG governance framework led by the board of directors [145]. - The company emphasizes the use of organic cotton, organic linen, hemp, and ramie, which do not require significant pesticide or fertilizer use, thus reducing environmental impact [166]. Corporate Governance - The company has adopted a corporate governance code and has adhered to all applicable provisions during the fiscal year 2024 [96]. - The board consists of three executive directors, one non-executive director, and three independent non-executive directors, complying with the listing rules regarding board composition [96]. - The company emphasizes diversity in its board composition, considering various factors such as age, culture, and professional experience [96]. - The company has established a whistleblowing policy to allow employees to report concerns regarding financial reporting and internal controls confidentially [108]. - The company has a dedicated internal audit department responsible for annual risk reporting procedures and evaluating risk management practices [120]. Employee and Management Practices - The total employee count increased to 1,596 as of June 30, 2024, up from 1,508 a year earlier, with total employee costs amounting to RMB 486.5 million, representing 9.3% of revenue [34]. - The company provides competitive compensation and training opportunities to employees, aiming to attract and retain dedicated staff [57]. - The company has implemented a comprehensive quality management system, achieving ISO 9001 certification and multiple product certifications, including OEKO-TEX® STANDARD 100 for infant products [188]. - The company emphasizes customer experience and satisfaction through a fully integrated sales network combining offline and online platforms [196]. Challenges and Risks - The company faces significant competition in the designer fashion market, with competitors potentially having stronger brand recognition and financial resources [51]. - The company acknowledges the risk of not meeting sales targets for new brands or product categories, which could adversely affect cash flow and growth prospects [52]. - The company relies on selected domestic OEM suppliers for production, which may be affected by industry downturns or natural disasters, potentially leading to supply shortages [53].

Investment Rating - The report assigns a "Buy" rating to Jiangnan Buyi (3306) with a target price of HKD 20.9 (RMB 19.0) based on a combination of PE and DCF valuation methods [5][10] Core Views - Jiangnan Buyi is a leading domestic designer brand with a 30-year history, strong brand equity, and a diversified portfolio covering women's, men's, children's, and homewear segments [5][11] - The company has achieved rapid revenue growth from RMB 1.38 billion in FY2014 to RMB 5.24 billion in FY2024, with a CAGR of 14.3%, and net profit CAGR of 19.0% [5][11] - The designer brand industry is growing faster than the overall apparel market, with a 7.6% CAGR from 2018-2023, outpacing women's wear (6%) and luxury/fast fashion sub-segments [5][11] - The company's strategy focuses on "design + brand-driven" growth, "omni-channel retail," and "multi-brand operations," aiming to achieve RMB 10 billion in retail sales by FY2026 [5][11] Financial Performance and Valuation - FY2025-2027 net profit is forecasted to be RMB 869/904/987 million, with a PE ratio of 9/8/8x [5][10] - The company's FY2024 revenue reached RMB 5.24 billion, with a gross margin of 66.3%, and net profit margin of 16.2% [27] - FY2024 dividend payout ratio was 97%, and future dividends are expected to remain above 75% [5][60] Brand Portfolio and Growth - The company operates a diversified brand matrix including mature brands (JNBY), growth brands (CROQUIS, jnby by JNBY, LESS), and emerging brands (POMME DE TERRE, JNBYHOME) [23][24] - Mature brands contributed 56% of FY2024 revenue, while growth brands accounted for 42%, with emerging brands making up 2% [24][44] - FY2019-2024 revenue CAGR for mature/growth/emerging brands exceeded 9% [5][45] Design and R&D - FY2024 design and R&D expenses increased by 16% to RMB 196 million, accounting for 4% of revenue [5][42] - The company emphasizes innovation in fabric and design, with a focus on art-inspired branding [5][42] Omni-Channel Retail Strategy - FY2024 online revenue grew 18.4%, accounting for 19.3% of total revenue, with a gross margin of 63.8% [49] - Offline revenue remains the primary contributor, with self-operated and distributor channels growing 16.4% and 17.7% respectively in FY2024 [49] - The company has 2,024 stores as of FY2024, with comparable store sales growth of 10.7% [50][52] Industry Outlook - The designer brand industry is expected to grow faster than fast fashion and luxury segments, with a 7.6% CAGR from 2018-2023 [40] - The mid-to-high-end women's wear market in China grew from RMB 297.7 billion in 2018 to RMB 391.6 billion in 2023, with a CAGR of 6% [36] - Female consumers prioritize product aesthetics (34%), material quality (25%), and brand reputation (22%) when making purchasing decisions [37][38]

Investment Rating - The investment rating for the company is "Outperform" [1] Core Views - The company is expected to achieve high-quality growth in FY24, with revenue increasing by 17.3% to 5.238 billion [3][5] - The net profit attributable to shareholders is projected to rise by 36.7% to 849 million [3][5] - The company maintains a high dividend yield of 12.1% for FY24, with a proposed final dividend of 0.86 HKD per share [4][5] Summary by Sections Financial Performance - FY24 revenue is expected to grow by 17.3% to 5.238 billion, with online and offline revenue increasing by 17.1% and 18.4% respectively [3][5] - Comparable same-store sales are projected to improve by 10.7% [3] - The net profit for FY24 is forecasted to increase by 36.7% to 849 million, with a net profit margin rising by 2.3 percentage points to 16.2% [3][5] Brand Performance - Revenue growth for mature, growing, and emerging brands is expected to be 17.1%, 17%, and 28.7% respectively [4] - The gross profit margin for FY24 is anticipated to be 66.25% [5] - The operating profit margin is projected to improve significantly across different brand categories [4] Store Expansion and Membership - The company plans to open a net of 34 stores in FY24, with a focus on maintaining core membership [4] - Active membership accounts are expected to reach 556,000, a year-on-year increase of 9.4% [4] Dividend and Valuation - The company plans to maintain a high dividend payout ratio of 97%, with a forecasted dividend yield of 9.8% for FY25 [4] - The estimated net profit for FY25 is projected at 888 million, with corresponding EPS of 1.71 HKD [5][7] - The company is valued at a P/E ratio of 9-10X for FY25, with a target price range of 16.75-18.62 HKD per share [4][5]

证券研究报告 | 2024年09月14日 证券分析师：丁诗洁 证券分析师：刘佳琪 0755-81981391 010-88005446 dingshijie@guosen.com.cnliujiaqi@guosen.com.cn S0980520040004 S0980523070003 合理估值 17.50 - 19.20 港元 收盘价 13.76 港元 总市值/流通市值 7138/7138 百万港元 52 周最高价/最低价 16.34/8.12 港元 近 3 个月日均成交额 10.21 百万港元 | --- | --- | --- | |----------|----------------|-------| | 基础数据 | | | | 投资评级 | 优于大市(维持) | | | | | | | | | | | | | | | | | | | 市场走势 | | | | --- | --- | --- | --- | --- | --- | |------------------------------------------------------------------------|--------- ...

Investment Rating - Buy (Maintained) [1] Core Viewpoints - FY2024 performance was strong, with total revenue reaching RMB 5,238 million, up 17.3% YoY, and net profit reaching RMB 848 million, up 36.5% YoY [3] - The company's gross margin increased by 1.0pct YoY to 66.3%, and net margin increased by 2.3pct YoY to 16.2% [3] - The company proposed a final dividend of HKD 0.86 per share, with a full-year dividend payout ratio of 97% [3] - The company's brand matrix was further improved, with the acquisition of onmygame brand, which holds 51% of its shares, to strengthen the children's wear sector [4] - The company's global independent physical retail stores totaled 2,024, an increase of 34 stores YoY [4] Performance Analysis - By brand, JNBY revenue was RMB 2,940 million, up 17.1% YoY, accounting for 56.2% of total revenue [4] - By channel, direct sales revenue was RMB 2,160 million, up 16.4% YoY, dealer channel revenue was RMB 2,070 million, up 17.7% YoY, and online channel revenue was RMB 1,010 million, up 18.4% YoY [4] - The company's gross margin by brand: JNBY 68.2%, up 1.0pct YoY, CROQUIS 66.3%, up 1.6pct YoY, jnby by JNBY 59.2%, up 0.6pct YoY, LESS 69.9%, up 1.2pct YoY, emerging brands 45.0%, down 1.4pct YoY [2] - The company's gross margin by channel: direct sales 74.1%, up 0.9pct YoY, dealer channel 59.3%, up 0.4pct YoY, online channel 63.8%, up 2.4pct YoY [2] Future Outlook - The company is expected to achieve revenue of RMB 5,560 million, RMB 5,956 million, and RMB 6,384 million in FY2025, FY2026, and FY2027, respectively [6] - The company's net profit is expected to reach RMB 875 million, RMB 938 million, and RMB 1,011 million in FY2025, FY2026, and FY2027, respectively [6] - The company's PE ratio is expected to be 7.6X, 7.1X, and 6.6X in FY2025, FY2026, and FY2027, respectively [6] - The company's ROE is expected to be 39.1%, 36.8%, and 35.1% in FY2025, FY2026, and FY2027, respectively [6]

Investment Rating - The report maintains a "Buy" rating for Jiangnan Buyi (03306) with a 6-month target price of 13.64 HKD [1] Core Views - Jiangnan Buyi's FY24 revenue reached 5.24 billion RMB, a 17.3% YoY increase, driven by comparable store sales growth, online channel expansion, and offline store network growth [1] - Net profit for FY24 was 850 million RMB, a 36.5% YoY increase [1] - The company's dividend payout ratio reached 75%, with a total annual dividend of 890 million HKD (approximately 830 million RMB) [1] - The report highlights the company's low valuation and high dividend attributes as key investment attractions [1] Financial Performance - FY24 gross margin improved to 66.3%, up 1.0 percentage point YoY [1] - Net profit margin reached 16.2%, a 2.3 percentage point increase YoY [1] - Total assets amounted to 7.08 billion HKD, with a debt-to-asset ratio of 49.42% [1] Brand Performance - JNBY brand contributed 2.94 billion RMB in revenue, accounting for 56.2% of total revenue, with a 17.1% YoY growth [1] - CROQUIS (速写) generated 750 million RMB, a 11.7% YoY increase, representing 14.4% of total revenue [1] - jnby by JNBY achieved 810 million RMB in revenue, a 21.4% YoY growth, contributing 15.4% to total revenue [1] - LESS brand recorded 620 million RMB in revenue, an 18.3% YoY increase, accounting for 11.9% of total revenue [1] Channel Performance - Offline channels contributed 81.5% of total revenue, with self-operated stores generating 2.16 billion RMB (41% of total) and franchised stores contributing 2.07 billion RMB (39.5% of total) [1] - Online channel revenue reached 1.01 billion RMB, an 18.4% YoY increase, representing 19.3% of total revenue [1] Store Network - As of June 30, 2024, the company operated 2,024 physical stores globally, including 515 self-operated stores and 1,509 franchised stores [1] - The retail network covers all provinces, autonomous regions, and municipalities in mainland China, as well as 9 other countries and regions [1] - Comparable store sales growth reached 11% in FY24, driven by store image upgrades, inventory sharing system improvements, and digital retail initiatives [1] Membership System - Member contribution accounted for over 80% of total retail sales, with active member accounts exceeding 550,000 (compared to 510,000 in FY23) [1] - Members with annual purchases exceeding 5,000 RMB reached 310,000 accounts (compared to 260,000 in FY23), contributing 4.49 billion RMB in retail sales, a 27% YoY increase [1] Future Projections - The report forecasts FY25-27 revenues of 5.5 billion RMB, 6.0 billion RMB, and 6.6 billion RMB respectively [2] - Net profit projections for FY25-27 are 880 million RMB, 900 million RMB, and 990 million RMB respectively [2] - EPS estimates for FY25-27 are 1.69 RMB, 1.74 RMB, and 1.91 RMB per share, with a consistent PE ratio of 7x [2]

9 Sep 2024 CMB International Global Markets | Equity Research | Company Update JNBY Design (3306 HK) Prudent guidance and generous dividends FY24 results were roughly inline with CMBI/BBG est.. Some investors could be concerned about the softened performance in 2H24, but this should be partially expected. The conservative tone for FY25E is not surprising and guidance should likely be achieved, thanks to further upgrades in member management and customer services, resilient GP margin and a better channel mix ...

Brand Portfolio and Strategy - The company has categorized its brand portfolio into three stages: mature brands (JMBY), growth brands (men's wear Su Xie, women's wear Less), and emerging brands (Penma, Relab, OMYGAME) [1] - Each brand has a unique brand language and market positioning, collectively building a diverse and rich brand matrix for the company [1] Business Lines and Market Positioning - The growth brands include Su Xie for men's wear and Less for women's wear, indicating a focus on expanding in the apparel sector [1] - Emerging brands such as Penma, Relab, and OMYGAME suggest the company is exploring new market segments and diversifying its offerings [1] Market and Industry Competition - The company's strategy of maintaining a diverse brand portfolio with distinct market positioning reflects a competitive approach to capture different consumer segments [1] Management Commentary and Future Outlook - No specific management commentary or future outlook was provided in the document [1] Other Important Information - No other significant information was mentioned in the document [1] Q&A Session - No Q&A session was recorded in the document [1]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 JNBY Design Limited 江南布衣有限公司 （於開曼群島註冊成立的有限公司） （股份代號：3306） 截至二零二四年六月三十日止年度之業績公告 | --- | --- | |-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 18.13, representing a potential upside of 33% from the current price of HKD 13.68 [3]. Core Insights - The company demonstrates high Return on Equity (ROE) and profitability, driven by a combination of high dividend payout, strong net profit margins, and efficient inventory turnover [2][24]. - The market for urban white-collar apparel in China is projected to reach approximately RMB 365.4 billion by 2026, with the company expected to capture a market share of 1.66% [2]. - The company has maintained a stable dividend payout ratio of around 75% since its listing in 2016, with cumulative dividends exceeding RMB 3.2 billion [13][22]. Summary by Sections Company Highlights - The company has a high dividend yield of 11% for FY23, positioning it among the top in its industry [2]. - It has achieved a sales net profit margin of 13.91% in FY23 and 19.29% in FY1H24, indicating strong profitability [2]. - Inventory turnover days are 188 and 135 for FY23 and FY1H24 respectively, showcasing industry-leading efficiency [2]. Investment Logic - The company's differentiation strategy in the designer brand segment fills a market gap, appealing to a targeted consumer base [2]. - The integration of traditional culture with modern design enhances brand appeal and attracts a younger demographic [2]. - The company has effectively reduced customer acquisition costs through multi-brand fan engagement strategies [2]. Future Outlook - The company is expected to achieve revenue of RMB 6.08 billion by 2026, with a compound annual growth rate (CAGR) of 8.05% [2]. - The urban white-collar apparel market is anticipated to grow at a CAGR of 4.33% over the next five years, indicating significant growth potential for the company [2]. Profit Forecast, Valuation, and Rating - Projected net profits for FY24-26 are RMB 825 million, RMB 859 million, and RMB 920 million, reflecting growth rates of 32.8%, 4.1%, and 7.0% respectively [2]. - The company’s price-to-earnings (P/E) ratio for FY24 is estimated at 8.4 times, suggesting substantial room for valuation improvement compared to the industry average of 13 times [2].