Investment Rating - The investment rating for the company is "Buy" with a target price of HK$ 12.42, down from a previous target of HK$ 16.78 [1][2]. Core Insights - The company faced significant headwinds in the first half of 2024, achieving total revenue of RMB 3.31 billion, which remained flat compared to the same period last year. The retail sales in China continued to stagnate, and the macroeconomic uncertainty posed challenges for the group [1][2]. - The shift in consumer purchasing behavior towards more conservative spending has negatively impacted local mid-to-high-end brands, including the company. Higher-end brands like La Koradior and NEXY showed growth, while other mid-to-high-end brands experienced declines [2]. - The number of stores decreased to 1,912, with both direct-operated and franchised stores declining compared to the end of last year. The company is replacing smaller stores with larger ones, but the diminishing demand is weakening the cross-selling capabilities of these larger stores [2]. - The gross margin performance was surprisingly strong, with an overall gross margin of 76.3%, driven by improved procurement strategies from brands like NAERSI and NEXY [2]. - Promotional spending increased to 3.7% of total revenue in the first half of 2024, higher than the previous guidance of 3%, due to a sudden shift in product demand [2]. - The company is adjusting its growth expectations due to the unexpected market shift, which has affected inventory and promotional strategies. The dual-engine growth expectation has not materialized, leading to a downward revision of profit forecasts and target price [1][2]. Financial Summary - For the first half of 2024, total revenue is projected at RMB 6,912.3 million, with a year-on-year growth of -1.3%. The gross profit is expected to be RMB 5,205.0 million, with a gross margin of 75.3% [5][6]. - The net profit for 2024 is projected at RMB 832.6 million, reflecting a significant decline of 35.5% compared to the previous year [5][6]. - The company’s financial ratios indicate a gross margin of 75.3% and a net profit margin of 12.0% for 2022, with expectations for slight improvements in subsequent years [6].

Investment Rating - The investment rating for EEKA Fashion (03709.HK) is "BUY" with a target price of HK$ 12.42, down from a previous target price of HK$ 16.78 [1][2]. Core Insights - The company reported a revenue of RMB 3.3 billion for the first half of 2024, which is flat compared to the previous year. The retail sales in China remained stagnant in Q2, leading to a challenging macro environment for EEKA Fashion [1][2]. - The consumption downgrade and polarization in China have intensified, affecting mid-to-high-end local brands like EEKA Fashion. This has resulted in a mixed performance where higher-end brands like La Koradior and NEXY have seen growth, while other mid-to-high-end brands have retreated [2]. - The number of stores has decreased to 1,912, with a decline in both group-operated and wholesaler stores. The company is replacing smaller stores with larger ones, but waning demand has reduced cross-selling capabilities [2]. - The gross margin has surprisingly increased to 76.3%, driven by successful procurement policies in the wholesale and e-commerce segments [2]. - Promotional expenses increased to 3.7% of total revenue in 2024 1H, exceeding the guidance of 3%, due to a sudden market turnaround. The company plans to adjust its promotional input dynamically based on the economic conditions in China [2]. Financial Summary - Revenue projections for the upcoming years are as follows: RMB 6,912.3 million for 2024, RMB 6,825.3 million for 2025, RMB 7,324.7 million for 2026, and RMB 7,958.0 million for 2027, indicating a year-on-year growth of -1.3% in 2024, followed by 7.3% in 2025 and 8.6% in 2026 [7]. - The gross profit for the years is projected to be RMB 5,205.0 million in 2024, RMB 5,186.0 million in 2025, RMB 5,563.3 million in 2026, and RMB 6,040.9 million in 2027 [7]. - The net profit is expected to decline significantly to RMB 536.8 million in 2024, with a recovery to RMB 674.1 million in 2025 and RMB 888.2 million in 2026 [7]. - The gross margin is projected to remain stable at around 75.9% for the next few years [8].

Investment Rating - The report downgrades the investment rating from "Buy" to "Outperform" [3][8]. Core Views - The company reported a revenue of 3.31 billion RMB for the first half of 2024, a year-on-year decrease of 1.0%, and a net profit of 280 million RMB, down 36.0% year-on-year, which aligns with expectations [3]. - The decline in net profit is attributed to a weak retail environment, high direct sales channel proportion leading to negative operating leverage, increased marketing expenses, and a one-time stock incentive expense of 99.48 million RMB [3]. - Excluding the stock incentive impact, the actual net profit would be 370 million RMB, representing a 19% decline compared to the comparable period in 2023 [3]. Summary by Sections Financial Performance - Revenue for FY2024E is projected at 6.95 billion RMB, with a year-on-year growth rate of 1% [4]. - Net profit for FY2024E is estimated at 614 million RMB, reflecting a year-on-year decrease of 27% [4]. - The company’s gross margin improved to 76.3%, while the net profit margin decreased to 8.4% [5][9]. Brand Performance - The main brand Koradior saw a revenue decline of 6.2% to 1.06 billion RMB, accounting for 32% of total revenue [6]. - NAERSI experienced a 4.3% revenue increase to 730 million RMB, representing 22% of total revenue [6]. - NEXY.CO's revenue grew by 5.1% to 500 million RMB, making up 15% of total revenue [6]. Store Operations - The total number of stores decreased by 68 to 1912, with direct stores accounting for 78% of the total [3]. - Direct store revenue decreased by 3.7% to 2.63 billion RMB, while online sales grew by 18% to 550 million RMB, representing 16% of total revenue [3][7]. Market Valuation - The company is currently valued at 62.3 billion RMB, with a projected PE ratio of 10 times for FY2024, indicating an 11% upside potential compared to the current market value [3][8].

Investment Rating - The report maintains a "Buy-B" rating for the company, indicating an expected price increase exceeding the benchmark index [2][5][10]. Core Insights - The company reported a slight decline in revenue for the first half of 2024, with total revenue of 3.306 billion yuan, down 1.03% year-on-year, and a significant drop in net profit of 36.03% to 283 million yuan [2][3]. - The decline in revenue was primarily driven by a decrease in offline sales channels, while online sales channels showed growth, particularly on platforms like Tmall and Douyin [3][4]. - The company's gross margin improved to 76.3%, up 1.04 percentage points year-on-year, despite rising sales and management expense ratios [3][4]. Company Performance Overview - As of the end of H1 2024, the company had 1,912 stores, a net decrease of 52 stores from the beginning of the year, with direct stores generating 2.634 billion yuan in revenue, down 3.7% year-on-year [3][4]. - Online sales reached 546 million yuan, a 17.8% increase year-on-year, accounting for 16.5% of total revenue [3][4]. - The company’s brands, including Koradior and NAERSI, showed varied performance, with Koradior's revenue declining by 6.19% while NAERSI grew by 4.3% [3][4]. Financial Projections - The company expects stable retail sales in 2024, with projected earnings per share (EPS) of 1.20, 1.33, and 1.45 yuan for 2024-2026, respectively [5][6]. - The report forecasts a price-to-earnings (P/E) ratio of 6.7, 6.1, and 5.6 for the same period, indicating a potentially undervalued stock [5][6]. - The company’s operating cash flow for H1 2024 was 452 million yuan, a decrease of 50.6% year-on-year, with cash and cash equivalents at 358 million yuan [4][8].

Investment Rating - The report maintains a "Buy" rating for the company [3]. Core Views - The company, Winner Fashion (03709.HK), is expected to have stable revenue growth for the full year, with a projected revenue of approximately CNY 33.1 billion for H1 2024, reflecting a year-on-year decrease of 1% and a net profit of CNY 2.8 billion, down 37% year-on-year [1]. - The company is a leading player in the domestic mid-to-high-end women's fashion market, with ongoing product efficiency improvements and store expansion expected to drive long-term performance growth [1][3]. - The report anticipates that the company's revenue for 2024 will remain flat year-on-year, with net profits projected at CNY 6.72 billion, CNY 8.07 billion, and CNY 9.21 billion for 2024, 2025, and 2026 respectively [1][2]. Financial Performance - For H1 2024, the company reported a gross margin of 76.3%, an increase of 1.0 percentage points year-on-year, while the net profit margin decreased by 4.7 percentage points to 8.6% [1]. - The revenue breakdown by brand shows varied performance, with Koradior generating CNY 10.57 billion (up 6% year-on-year), NAERSI at CNY 7.35 billion (up 4%), and NEXY.CO at CNY 5.04 billion (up 5%) [1]. - The company's revenue from direct sales, franchises, and e-commerce for H1 2024 was CNY 26.3 billion, CNY 1.3 billion, and CNY 5.5 billion respectively, with e-commerce showing a significant growth of 17.8% year-on-year [1]. Market Position and Strategy - The company is focusing on channel upgrades and store quality optimization, with a reduction in the number of stores to enhance overall efficiency [1]. - The report highlights the company's strategy of increasing investment in core product lines and improving inventory turnover, with inventory levels rising by 40% year-on-year to CNY 12.7 billion as of H1 2024 [1]. - The company is expected to benefit from a more efficient product system and improved inventory management in the future [1].

Summary of the Conference Call Company Overview - The conference call pertains to Winner Fashion Holdings, listed under the stock code 3709, discussing its HK2024 interim performance results [1] Key Points and Arguments - The call began with an introduction of the board members and management team present at the meeting, including the Chairman and Executive Director, Mr. Junming [1] Other Important Content - No additional financial data, industry insights, or specific performance metrics were provided in the excerpt [1]

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 3,306.37 million, a slight decrease of 1.03% or RMB 34.53 million compared to RMB 3,340.90 million for the same period in 2023[2] - Net profit for the six months ended June 30, 2024, was RMB 282.85 million, a decrease of 36.03% or RMB 159.35 million compared to RMB 442.20 million for the same period in 2023[2] - Operating cash inflow for the six months ended June 30, 2024, was RMB 451.83 million, down from RMB 914.61 million for the same period in 2023[2] - Basic earnings per share for the six months ended June 30, 2024, was RMB 0.41, compared to RMB 0.66 for the same period in 2023[2] - Total comprehensive income for the six months ended June 30, 2024, was RMB 270.90 million, down from RMB 416.28 million for the same period in 2023[6] - The company reported a pre-tax profit of RMB 278,662,000 for the six months ended June 30, 2024, compared to RMB 445,227,000 for the same period in 2023[21] - The income tax expense for the six months ended June 30, 2024, was RMB 21,536,000, significantly lower than RMB 63,811,000 in the previous year[19] - Net profit for the reporting period was RMB 282.85 million, a decrease of 36.03% or RMB 159.35 million compared to RMB 442.20 million in the first half of 2023, with a net profit margin dropping from 13.24% to 8.55%[68] Revenue Breakdown - Direct retail store sales amounted to RMB 2,633,960,000, down 3.7% from RMB 2,734,368,000 year-on-year[15] - E-commerce platform sales increased by 17.7% to RMB 546,343,000 from RMB 463,715,000 in the previous year[15] - Revenue from direct retail stores was RMB 2,633.96 million, accounting for 79.67% of total revenue, which represents a decrease of 3.67% from RMB 2,734.37 million in the same period last year[51] - E-commerce revenue increased by 17.82% to RMB 546.34 million, up from RMB 463.72 million in the first half of 2023, representing 16.52% of total revenue[51] - Revenue from Tmall e-commerce platform rose by 7.91% to RMB 124.41 million, while Vipshop's revenue increased by 14.80% to RMB 239.69 million[53] - EEKA Fashion Mall's revenue surged by 35.45% to RMB 49.71 million, and Douyin's revenue grew by 4.01% to RMB 101.39 million[53] Asset and Equity Position - Non-current assets as of June 30, 2024, totaled RMB 3,424.96 million, compared to RMB 3,480.14 million as of December 31, 2023[7] - Current assets as of June 30, 2024, were RMB 3,156.18 million, down from RMB 3,549.66 million as of December 31, 2023[7] - Total equity attributable to equity holders of the parent as of June 30, 2024, was RMB 4,430.08 million, compared to RMB 4,576.91 million as of December 31, 2023[9] Operational Highlights - The company operates a single business segment in China, focusing on women's retail and wholesale, with no separate segment analysis presented[14] - The number of direct retail stores as of June 30, 2024, was 1,485, with NAERSILING operating 88 stores[52] - CADIDL operated 153 stores as of June 30, 2024, contributing to the overall retail strategy focused on enhancing store quality and consumer experience[48] - The total number of retail stores decreased from 1,964 to 1,912, with 96 new stores opened and 148 closed during the reporting period[56] Marketing and Brand Strategy - Koradior and NAERSI, the company's two main brands, generated sales revenue exceeding RMB 3.85 billion, ranking among the top ten brands in the industry[37] - NAERSI's promotional activities achieved nearly 100 million exposures through various media collaborations and events[40] - The company plans to continue enhancing product quality and brand image to navigate the competitive high-end women's apparel market during economic downturns[36] - Koradior's marketing strategy includes collaborations with international celebrities to strengthen brand recognition and influence[38] - NAERSI's "High-Energy Wardrobe" initiative focuses on product value analysis and highlights signature craftsmanship to attract urban female consumers[40] - ELSEWHERE is integrating its marketing and brand image to enhance its presence in the sustainable fashion sector, appealing to environmentally conscious consumers[45] Cost and Expense Management - Research and development costs increased to RMB 103,430,000, up 22% from RMB 84,856,000 in the previous year[18] - The company incurred a total employee benefit expense of RMB 805,946,000, an increase from RMB 703,779,000 in the same period last year[18] - Operating expenses for the reporting period amounted to RMB 2,272.42 million, an increase of 9.15% or RMB 190.49 million compared to RMB 2,081.93 million for the six months ended June 30, 2023[64] - Sales and distribution expenses were RMB 1,902.95 million, up 6.19% from RMB 1,792.03 million for the same period last year, primarily due to increases in salaries, employee benefits, store expenses, and promotional investments[65] - Administrative and other operating expenses rose by 27.45% to RMB 369.47 million from RMB 289.90 million in the same period last year, mainly due to increased salaries and R&D costs for product design improvements[66] Future Outlook and Strategy - The company plans to focus on steady development of existing brand businesses and aims to achieve annual operational goals while enhancing quality across all business areas[75] - The company will continue to invest in brand building and improve marketing efficiency through systematic promotion and quantifiable target assessments[75] - The product system will be enhanced by improving product quality and focusing on core product categories, with an emphasis on upgrading materials and refining craftsmanship[75] - The company aims to optimize offline store operations and expand online channel layouts, particularly in high-end markets and through partnerships with quality regional distributors[75] - The supply chain will be further integrated and improved, focusing on quality and enhancing overall bargaining power through consolidated procurement of raw materials[75] Dividend and Shareholder Information - The board of directors did not recommend the declaration of an interim dividend for the six months ended June 30, 2024[2] - The board has decided not to declare any interim dividend for the six months ended June 30, 2023[76] - Approximately 3,100,000 shares were purchased from the market under the share incentive plan, with total costs around HKD 32,000,000[78] Compliance and Governance - The company plans to adopt new and revised International Financial Reporting Standards effective from January 1, 2024, which are not expected to have a significant impact on the financial statements[12] - The audit committee, composed of three independent non-executive directors, is responsible for reviewing financial reporting and risk management[79]

Investment Rating - The report maintains a "Buy" rating for the company [5][6][11] Core Views - The company's Q1 performance met expectations, with a revenue of 1.7 billion RMB, showing a low single-digit year-on-year growth. The main brand Koradior experienced a slight decline of 3%, while the second brand NAERSI grew by 5%, and the third brand NEXY.CO increased by 9%. The new brand FUUNNY FEELLN saw a significant growth of 21% [5] - The online sales channel showed strong growth, with a 18% year-on-year increase in Q1. Notably, Tmall sales grew by 29%, and Douyin and video account sales increased by 30% [5] - The company is focusing on optimizing its offline store structure, with a projected reduction of at least 10% in store numbers for the year, aiming to enhance user experience and sales conversion [5] - Inventory turnover efficiency has improved, with a notable increase in the proportion of main sales items. The company aims to enhance customer repurchase rates and purchase frequency through product strategy adjustments [5] - The company announced a stock incentive plan with ambitious sales growth targets, aiming for a retail revenue of 10.5 billion RMB in 2024 [5] - The company is positioned as a leading Chinese light luxury brand management group, with a focus on product, channel, supply chain, and digital upgrades [5] Financial Data and Profit Forecast - The company’s projected revenue for 2024 is 8.132 billion RMB, with a year-on-year growth rate of 18%. The net profit is expected to reach 1.005 billion RMB, reflecting a 20% increase [6][11] - The earnings per share (EPS) for 2024 is projected at 1.41 RMB, with a price-to-earnings (PE) ratio of 8 times [6][11] - The financial summary indicates a steady increase in revenue and net profit over the next few years, with net profits projected to reach 1.365 billion RMB by 2026 [11]

Financial Performance - The company reported a significant growth in revenue, achieving a total of 1.2 billion RMB for the fiscal year 2023, representing a year-on-year increase of 15%[3] - Revenue for the year ended December 31, 2023, was RMB 6,912,301 thousand, representing a 22.05% increase from RMB 5,663,430 thousand in 2022[9] - Gross profit for the same period was RMB 5,204,988 thousand, up 22.34% from RMB 4,254,420 thousand in 2022[9] - Net profit surged by 121.78% to RMB 832,632 thousand compared to RMB 375,425 thousand in the previous year[9] - Basic earnings per share increased to RMB 124 from RMB 57, while diluted earnings per share rose to RMB 122 from RMB 56[11] - The gross profit margin improved slightly to 75.30% from 75.12%, and the net profit margin increased significantly to 12.05% from 6.63%[9] - The company achieved a retail revenue of nearly 9 billion RMB and a net profit exceeding 800 million RMB for the year ending December 31, 2023, marking a significant increase in profitability despite a challenging consumer environment[44] - Revenue growth exceeded 20% year-on-year, while net profit saw an increase of over 120%, and store efficiency improved with a 27% increase in sales per store[45] - Total revenue for the year ended December 31, 2023, was RMB 6,912.30 million, a growth of 22.05% from the previous year[71] - The net profit attributable to the parent company was RMB 838.17 million, an increase of 119.17% compared to RMB 382.43 million for the year ended December 31, 2022[61] Market Expansion and Strategy - The company aims to expand its market presence in Southeast Asia, with a target of opening 50 new retail stores by the end of 2024[4] - The company plans to launch three new brands in 2024, targeting the millennial demographic, with an expected contribution of 200 million RMB in revenue[3] - The company plans to continue expanding its direct retail network to enhance market presence and customer engagement[95] - The company plans to become the first luxury brand management group in China with retail sales exceeding 10 billion RMB and net profit surpassing 1 billion RMB by 2024, with further targets of 15 billion RMB in 2025 and 18 billion RMB in 2026[45] - The company will deepen its excellent product capability system and improve product management through enhanced digital infrastructure and big data support[115] - The company will implement a strategy to optimize offline and online channel operations, focusing on enhancing sales per square meter and expanding new stores[116] Brand Development and Marketing - The company received multiple awards, including the "Top 10 Fashion Brands" recognition at the Guangdong Fashion Awards 2023[6] - Koradior officially announced Lily Collins as the new brand ambassador to promote the brand's romantic feminine style[36] - The company has introduced new brand ambassadors, including Lily Collins and Jin Chen, to strengthen its brand image[45] - The company has implemented a "brand upgrade" strategy, featuring Hollywood star Lily Collins as the new brand ambassador for Koradior[70] - Koradior brand appointed Hollywood star Lily Collins as the new brand ambassador, enhancing brand marketing and significantly increasing brand awareness, attracting core consumer growth[73] Operational Efficiency - The gross profit margin improved to 60%, up from 55% in the previous year, indicating enhanced operational efficiency[3] - The current ratio improved to 2.00 from 1.78, indicating better short-term financial health[10] - The interest coverage ratio increased to 21.41 from 9.25, reflecting stronger earnings relative to interest expenses[10] - The company has established a highly digitalized data center to improve operational efficiency across its various business segments[47] - The company has adopted a direct sales model combined with distribution to enhance consumer insights and adapt to changing market conditions[48] Social Responsibility and Sustainability - Winner Fashion donated over RMB 20 million worth of winter supplies to aid regions affected by the Gansu-Qinghai earthquake[29] - The company actively engaged in social responsibility by donating over 20 million RMB in winter supplies to earthquake-affected areas in Gansu and Qinghai[44] - The company is committed to environmental sustainability, implementing green measures such as LED lighting and recyclable packaging in its operations[180] - ELSEWHERE launched the "Summer Island Plan" to explore sustainable fashion, collaborating with three marine artists to raise awareness for ocean ecology[39] Corporate Governance - The company is committed to maintaining high standards of corporate governance through the appointment of qualified directors and management[130][131] - The board consists of six members, including three executive directors and three independent non-executive directors, ensuring a balanced decision-making process[134] - The company has established a risk management system to monitor and improve operational risk management as business grows[118] - The board will continue to review the governance structure and may separate the roles of Chairman and CEO in the future[132] Employee and Management Development - The number of employees as of December 31, 2023, was 10,335, slightly up from 10,327 in 2022, with a notable increase in the product design and R&D department from 555 to 562 employees[109] - The company emphasizes employee development, offering training programs and competitive compensation, including stock option plans[177] - The company is focused on enhancing its management team with professionals who have significant industry experience, which is expected to drive future growth[127][128][129] Future Outlook - The company aims to achieve retail revenue targets of RMB 10.5 billion to RMB 11.5 billion in 2024, reflecting a strong growth outlook[112] - The Chinese economy is expected to recover significantly in 2023, with major provinces targeting GDP growth of around 5% or more in 2024[112] - The company plans to explore innovative layouts in shopping centers and outlet stores to leverage competitive advantages in mid-to-high-end department stores[116]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HK$ 16.78 [2][3] Core Insights - The company achieved a total revenue of RMB 6.91 billion in 2023, with a slight increase in gross margin to 75.3%, leading to a net profit growth of 121.8% year-on-year [2][8] - The company plans to announce quarterly revenue starting from Q1 2024, reflecting confidence in its operations [2] - The outlook for 2024 is stable, with potential surprises in 2025 due to double-digit growth in its brands and a rebound in retail sales in China [2][8] - The company is focusing on brand strategy, investing approximately 3% of its revenue in brand promotion, which includes activities like fashion week events and selecting brand ambassadors [2][8] Financial Performance - Revenue projections for the upcoming years are as follows: RMB 7.88 billion in 2024, RMB 8.45 billion in 2025, and RMB 9.06 billion in 2026, with annual growth rates of 14.0%, 7.3%, and 7.2% respectively [8][12] - The gross profit is expected to increase from RMB 5.21 billion in 2024 to RMB 6.83 billion in 2026, maintaining a gross margin around 75% [8][12] - Net profit is projected to grow from RMB 832.6 million in 2024 to RMB 1.12 billion in 2026, with annual growth rates of 12.5% and 14.1% respectively [8][12] Market Position - The company has a market capitalization of approximately HK$ 9.38 billion, with a price-to-earnings ratio of 9.9x and a price-to-sales ratio of 1.9x [5] - Compared to industry peers, the company maintains a competitive gross margin of 75.3%, which is higher than the average of 56.7% in the sector [5]