Core Viewpoint - The company is experiencing steady growth in its fiscal year 2025, with a focus on maintaining a high dividend payout ratio, supported by revenue growth from online channels and expansion of offline stores [1][2] Financial Performance - For the fiscal year ending June 30, 2025, the company's revenue increased by 4.6% year-on-year to 5.548 billion yuan, and net profit attributable to shareholders rose by 5.3% to 893 million yuan [1] - In the second half of the fiscal year, revenue grew by 4.2% year-on-year to 2.392 billion yuan, with net profit increasing by 6.6% to 293 million yuan [2] - The gross profit margin decreased by 0.3 percentage points to 65.6% due to a shift from a higher-margin self-operated model to a lower-margin distribution model [1] - Operating cash flow decreased by 29.2% to 1.133 billion yuan, primarily due to increased inventory [1] Channel and Brand Performance - Online revenue saw a significant increase of 18.3% year-on-year to 1.202 billion yuan, while offline self-operated and distribution revenues experienced a decline of 6.2% and an increase of 9.6%, respectively [2] - The main brand's revenue grew by 2.3%, accounting for 54.3% of total revenue, while emerging brands saw a remarkable growth of 107.4%, making up 6.5% of total revenue [2] Dividend Policy - The company maintains a high dividend payout ratio, with total dividends for the year amounting to 716 million Hong Kong dollars, representing over 75% of net profit [1]

Core Viewpoint - Jiangnan Buyi aims to achieve a revenue target of 10 billion RMB by the fiscal year 2026, despite challenges in the current market environment [1] Financial Performance - For the fiscal year ending June 30, 2025, Jiangnan Buyi reported total revenue of 5.548 billion RMB, a year-on-year increase of 4.64%, and a profit of 898 million RMB, up 6.02% [1][3] - The growth rate of 4.6% for the fiscal year 2025 is lower than the 5% growth rate in the first half of the year, indicating a slight slowdown [3] Brand Performance - The main brand, JNBY, generated revenue of 3.012 billion RMB, accounting for 54.3% of total revenue, with a growth of 2.3% [2][3] - Growth brands, including Croquis, jnby by JNBY, and LESS, saw a slight decline in revenue, totaling 2.174 billion RMB, down 0.5% [2][3] - Emerging brands experienced significant growth, with revenue increasing by 107.4% to 361 million RMB, representing 6.5% of total revenue [2][3] Store Expansion - As of June 30, 2025, Jiangnan Buyi operated 2,117 stores, an increase of 92 stores from the previous year [4][5] - The number of JNBY stores reached 924, while growth brands had 961 stores, and emerging brands had 52 stores [4][5] Sales Channels - In the fiscal year 2025, 81% of Jiangnan Buyi's revenue, amounting to 2.554 billion RMB, came from offline retail stores [6][10] - Online sales grew by 18.3% to 1.202 billion RMB, accounting for 21.7% of total revenue [10] Membership and Customer Engagement - Membership contributed over 80% of retail revenue, with active member accounts increasing to over 560,000 [9][11] - High-value members, defined as those with annual purchases exceeding 50,000 RMB, contributed 48.6 billion RMB, accounting for over 60% of offline retail revenue [9][11] Strategic Direction - Jiangnan Buyi is exploring acquisition opportunities while maintaining a cautious approach, focusing on existing brands for growth in the next three to five years [8] - The company is enhancing its fan-centric retail network and leveraging data-driven strategies to improve customer engagement and loyalty [12]

Group 1 - The core viewpoint of the report is that despite a weak macro consumption trend, the company Jiangnan Buyi (03306) maintains an "outperform" rating, with slight downward adjustments to FY2026-2027 profit forecasts [1] - The expected net profits for FY2026-2028 are projected to be 900 million, 960 million, and 1.01 billion yuan respectively, reflecting year-on-year growth of 1.0%, 6.8%, and 4.8% [1] - The company demonstrates strong and steady growth that outpaces the industry, supported by significant brand strength, product innovation, channel operations, and supply chain advantages [1] Group 2 - The company is a leading designer brand group in China, with multiple brands at different stages of maturity: mature, growth, and emerging [2] - For the fiscal year ending June 30, 2025, the company reported a revenue increase of 4.6% to 5.548 billion yuan and a net profit increase of 5.3% to 893 million yuan, driven by online channel growth and expansion of offline stores [2] - The gross margin decreased by 0.3 percentage points to 65.6%, primarily due to a shift from a higher-margin self-operated model to a lower-margin distribution model [2] - The operating cash flow decreased by 29.2% to 1.133 billion yuan, influenced by increased inventory, but the net cash ratio remains at a healthy level of 1.27 [2] - The company maintains a high dividend payout ratio, with total dividends of 716 million Hong Kong dollars for the year, resulting in a dividend rate exceeding 75% [2]

Group 1 - The core viewpoint of the report is that despite a weak macro consumption trend, the company Jiangnan Buyi (03306) maintains an "outperform" rating, with slight downward adjustments to FY2026-2027 profit forecasts [1] - The expected net profits for FY2026-2028 are projected to be 900 million, 960 million, and 1.01 billion yuan respectively, reflecting year-on-year growth of 1.0%, 6.8%, and 4.8% [1] - The company demonstrates strong and steady growth that outpaces the industry, supported by significant brand strength, product innovation, channel operations, and supply chain advantages [1] Group 2 - As of June 30, 2025, the company reported a revenue increase of 4.6% year-on-year to 5.548 billion yuan, with a net profit attributable to shareholders growing by 5.3% to 893 million yuan [2] - Revenue growth is primarily driven by the expansion of online channels and the scaling of offline stores [2] - The gross profit margin decreased by 0.3 percentage points to 65.6%, influenced by a shift from a higher-margin self-operated model to a lower-margin distribution model [2] - The operating cash flow net amount decreased by 29.2% to 1.133 billion yuan, mainly due to increased inventory, but the net cash ratio remains at a healthy level of 1.27 [2] - The company maintains a high dividend level, with total dividends of 716 million Hong Kong dollars for the year, resulting in a dividend payout ratio exceeding 75% [2]

Investment Rating - The report maintains an investment rating of "Synchronize with the market - A" for the textile and apparel industry [1]. Core Insights - The textile and apparel industry has shown mixed performance in recent months, with a slight increase in textile exports but a decline in clothing exports. Specifically, from January to August 2025, China's textile yarn, fabric, and products exports increased by 1.6%, while clothing and accessories exports decreased by 1.7% [2][18]. - Major Taiwanese textile manufacturers reported a decline in revenue for August 2025, with significant year-on-year decreases for companies like Yuanyuan Group and Laiyixing, while some companies like Laiyixing still showed growth in the first eight months of the year [19][20]. Summary by Sections 1. Recent Observations - Taiwanese textile manufacturers reported a general decline in revenue for August 2025, with Yuanyuan Group's revenue down by 9.7% year-on-year, and Laiyixing down by 23.11% [19][20]. 2. Market Performance - The SW textile and apparel sector rose by 0.67% this week, lagging behind the SW light industry sector, which increased by 1.88% [20][21]. - The PE-TTM for SW textile manufacturing is 22.05 times, while for SW apparel and home textiles, it is 30.57 times, indicating varying levels of valuation across sub-sectors [24]. 3. Industry Data Tracking - From January to August 2025, China's textile and apparel exports totaled $945.13 billion and $1,027.61 billion, respectively, with a slight increase in textile exports and a decrease in clothing exports [48]. - The domestic retail sales in July 2025 reached 3.88 trillion yuan, showing a year-on-year growth of 3.7% [55]. 4. Industry News - Stone Island opened a new flagship store in Hangzhou, showcasing its commitment to innovation and sustainability [67][68]. - Jiangnan Buyi Group reported a 4.6% increase in revenue for the fiscal year ending June 30, 2025, driven by online sales growth and an expansion of its offline store network [70][71].

Investment Rating - The investment rating for the company is "Outperform the Market" [3][5][31] Core Views - The company has demonstrated steady revenue growth of 4.6% year-on-year, reaching 5.548 billion CNY for the fiscal year 2025, with a net profit increase of 5.3% to 893 million CNY [1][3] - The growth in revenue is primarily attributed to the expansion of online channels and the increase in the number of physical stores [1] - The company maintains a high dividend payout ratio of over 75%, with total dividends amounting to 716 million HKD for the year [1][3] Financial Performance Summary - For the second half of the fiscal year, revenue grew by 4.2% to 2.392 billion CNY, while net profit increased by 6.6% to 293 million CNY [2] - Online sales saw a significant increase of 18.3% year-on-year, contributing to the overall revenue growth [2] - The gross profit margin slightly decreased by 0.7 percentage points to 66.2%, while the overall expense ratio improved marginally by 0.2 percentage points to 50.3% [2] Revenue and Profit Forecast - The company is projected to achieve revenues of 6.005 billion CNY in FY2026, with a growth rate of 8.2%, and net profits of 901 million CNY, reflecting a growth of 1.0% [4][31] - The earnings per share (EPS) is expected to be 1.74 CNY in FY2026, with a gradual increase to 1.95 CNY by FY2028 [4][31] Market Position and Valuation - The company is positioned as a leading designer brand group in China, with a strong brand presence and product innovation capabilities [3][31] - The current market price is 19.29 HKD, with a market capitalization of 10 billion HKD [5][31] - The company maintains a price-to-earnings (P/E) ratio of 10.5 for FY2025, indicating a relatively attractive valuation compared to peers [4][32]

Macro Economic Group - In August, M2 growth was 8.8% year-on-year, the highest since December 2023, while M1 growth was 6.0%, the highest since January 2023, indicating a significant acceleration in the speed of money circulation [5][6] - The total social financing (TSF) in August was 2.57 trillion yuan, lower than the previous year's figure by 463 billion yuan, with a notable decrease in government bonds and loans [5] - Bank credit increased by 590 billion yuan in August, but this was a year-on-year decrease of 310 billion yuan, indicating a contraction in both household and corporate loans [6] Industry Comprehensive Group - Recent US sanctions on Chinese companies, including Shanghai Fudan, may lead to short-term stock sell-offs, but China's countermeasures could benefit domestic analog chip manufacturers [9] - The global analog chip market is recovering, with price increases from major manufacturers, suggesting improved profitability for domestic firms if anti-dumping investigations succeed [9] Advanced Manufacturing Group - In August, China's battery sales reached 134.5 GWh, a year-on-year increase of 45.6%, with lithium iron phosphate batteries accounting for the majority of the growth [11] - The National Development and Reform Commission aims for new energy storage capacity to reach 180 million kilowatts by 2027, driving significant investment in the sector [12] - The automotive industry is projected to see a 3% increase in total sales in 2025, with a 20% growth in new energy vehicle sales, indicating a shift towards smart and electric vehicles [12] Consumer Group - Jiangnan Buyi reported a total revenue of 5.548 billion yuan for the 2025 fiscal year, a 4.6% increase, driven by online sales and store expansion [14] - The company's membership system plays a crucial role, with over 80% of retail revenue coming from members, highlighting the importance of customer loyalty [14] Bond Research Group - The bond market experienced an overall rise in interest rates, influenced by concerns over high redemption fees for bond funds and a weak inflation outlook [16]

Core Viewpoint - The report from CICC indicates that Jiangnan Buyi achieved a revenue of 5.55 billion yuan for the fiscal year ending June 2025, representing a year-on-year increase of 4.6%, and a net profit attributable to shareholders of 890 million yuan, up 5.3%, aligning with expectations [1] Group 1: Financial Performance - Jiangnan Buyi's revenue for the fiscal year ending June 2025 reached 5.55 billion yuan, marking a 4.6% increase year-on-year [1] - The company's net profit attributable to shareholders was 890 million yuan, reflecting a year-on-year growth of 5.3% [1] Group 2: Future Outlook - The company reiterated its retail target of 10 billion yuan for the fiscal year 2026 [1] - CICC anticipates that the company's terminal cash flow in July and August will outperform peers, driven by strong member loyalty and multi-brand cultivation capabilities [1] Group 3: Strategic Initiatives - Jiangnan Buyi plans to establish its own logistics center, which is expected to reduce financial income net of capital occupation, leading to a faster revenue growth rate compared to profit growth in fiscal year 2026 [1] Group 4: Valuation and Rating - CICC raised the target price for Jiangnan Buyi by 18% to 23.7 HKD, corresponding to a price-to-earnings ratio of 12 times for this year and 11.6 times for next year, indicating a 19% upside potential from the current price [1] - The rating of "outperforming the industry" is maintained [1]

Summary of Jiangnan Buyi Conference Call Company Overview - **Company**: Jiangnan Buyi - **Industry**: Fashion Retail Key Points Business Strategy - Jiangnan Buyi maintains a high dividend policy with a payout ratio of 75% [2][3] - The company operates on three core strategies: dual-driven design and branding, multi-brand scaling, and a high-engagement fan economy [2][4] - The gross margin for the fiscal year remains above 65%, with discounts narrowing by 2-3 percentage points [2][4] Financial Performance - For the fiscal year 2025, revenue exceeded 5.5 billion RMB, a year-on-year increase of 4.6%, while profit approached 900 million RMB, growing by 6% [3][4] - The company aims for a retail revenue target of 10 billion RMB by fiscal year 2026, with mature brand JNBY expected to grow in low to mid-single digits [6][4] - Growth brands are projected to achieve double-digit growth, while emerging brands focus on product refinement [6][4] Sales and Inventory Management - Strong sales performance in July and August, with high single-digit growth in July and over 10% growth in August [7][4] - Inventory increase attributed to business growth support and new brand acquisitions, with a future healthy inventory turnover expected to be between 150-200 days [7][8] - The company manages excess inventory through strict discount controls and channels for clearing out-of-season products [7][4] Membership and Customer Engagement - The number of high-value members (annual spending over 5,000 RMB) exceeded 337,000, contributing nearly 4.9 billion RMB in retail sales [5][4] - The company emphasizes maintaining core high-value members while also attracting new members through rich benefits and highly customized services [12][4] - A fan-centric operational system is established to enhance member loyalty and engagement [10][11] New Brand Development - The newly acquired brand On My Game saw a growth rate of approximately 70% and plans to open physical stores in Beijing and Hangzhou in fiscal year 2026 [13][4] - Another acquisition, Block, experienced nearly 50% growth, with a cautious approach to store expansion due to high space requirements [13][4] Future Outlook and Challenges - Despite a complex environment, the company achieved stable growth, with highlights including stable gross margins and active member growth [14][4] - Key future investments include the construction of a logistics center, with an estimated investment of 280 million RMB for land acquisition [14][4] - The company plans to maintain a dividend payout ratio of 75% despite ongoing investments [22][4] Online and Offline Sales Performance - Online sales surpassed 20% of total sales in fiscal year 2025, driven by the performance of On My Game [15][4] - Future online and offline sales ratios will be adjusted based on brand development stages [15][4] Pricing and ASP Trends - The average selling price (ASP) increased from 2,130 RMB to approximately 2,200 RMB in fiscal year 2025 [17][4] - High-value customers demonstrate strong purchasing power, with total spending nearing 4.9 billion RMB [17][4] AI and Technology Integration - The company has made systematic progress in AI applications across various operational aspects, enhancing efficiency and decision-making [18][19][4] Shareholder Returns - The company engages in annual share buybacks for employee stock incentives, maintaining a generous dividend policy [23][24][4] Market Position - Jiangnan Buyi's performance is noted as exceptional among apparel companies, with attractive dividend yields amidst market fluctuations [24][4]

Investment Rating - The report maintains a "Positive" outlook on the textile and apparel industry, highlighting potential investment opportunities in specific segments such as non-woven fabrics and sportswear [2][9]. Core Insights - The textile and apparel sector underperformed the market, with the SW textile and apparel index rising by 0.7%, lagging behind the SW All A index by 1.5 percentage points [4][6]. - Recent industry data indicates a 2.9% year-on-year increase in retail sales for clothing, shoes, and textiles, totaling 837.1 billion yuan from January to July [30]. - Exports of textiles and apparel decreased by 0.3% year-on-year, amounting to 197.27 billion USD from January to August, with a notable 5.0% decline in August alone [30][31]. Summary by Sections Textile Sector - Focus on investment opportunities in the entire non-woven fabric supply chain, with a significant weekly increase of 26% for Yanjiang Co. The production of non-woven fabrics has been declining since its peak in 2020, but the pandemic has heightened hygiene awareness, maintaining a large market scale [9][12]. - Yanjiang Co. has a global production footprint in China, Egypt, the USA, and India, with major clients including Procter & Gamble and Kimberly-Clark, contributing significantly to its revenue [9][12]. - The report recommends Nobon Co. for its growth potential in personal care and new tobacco products, highlighting its strong market position and technological capabilities [10][12]. Apparel Sector - Jiangnan Buyi reported a stable growth in its latest annual report, with a 4.6% increase in revenue to 5.55 billion yuan and a 6.0% rise in net profit to 900 million yuan for FY25 [12][19]. - The sportswear segment shows resilience, with brands like Anta and Li Ning demonstrating strong performance despite market challenges, with Anta's revenue increasing by 14% year-on-year [13][19]. - The report emphasizes the importance of domestic demand recovery in 2025, suggesting that high-quality domestic brands are poised for a turnaround [10][12]. Market Trends - The report notes a K-shaped recovery in retail, with high-end and cost-effective brands performing better. Innovations in retail formats are accelerating, with plans for significant store expansions in the coming year [13][19]. - The textile manufacturing sector is expected to benefit from favorable trade conditions, particularly for manufacturers with strong supply chain capabilities [10][12].