Investment Rating - The investment rating for the company is "Outperform the Market" [5][3]. Core Views - The company experienced a revenue decline of 8.0% year-on-year in 2024, totaling 18.454 billion yuan, primarily due to weak offline foot traffic and channel restructuring. However, net profit showed resilience, increasing by 0.2% to 491 million yuan, supported by improved gross margin and effective cost management strategies [1][3]. - The company is focusing on enhancing its online channels, with the proportion of revenue from all-channel sales rising to 28%, a 16% increase year-on-year. Key drivers include significant growth in sales through Douyin and the integration of local live streaming with national inventory [2][3]. - The management outlook for 2025 indicates stable revenue and profit, with a target of maintaining the number of direct stores around 3,300 and increasing the all-channel revenue share to 30% [2][3]. Summary by Sections Financial Performance - In 2024, the company reported a total revenue of 18.454 billion yuan, with a net profit of 491 million yuan. The gross margin improved by 0.5 percentage points to 34.2% due to strict discount control and inventory optimization [1][4]. - The fourth quarter of 2024 saw a revenue decline of 3.2% year-on-year, with a net profit drop of 17.3% to 150 million yuan, attributed to the same challenges faced throughout the year [1][2]. Operational Insights - The company reduced its direct store count by 75 to 3,448, while the average store area increased slightly. The average monthly sales per square meter and per store declined significantly due to poor customer traffic [2]. - The company plans to open 100 new stores in 2025, contributing to revenue growth from new brands that have been incubated over the past one to two years [2][3]. Future Projections - The company expects stable revenue and profit for 2025, with net profit projections of 492 million yuan, reflecting no growth compared to 2024. The target price is maintained at 0.59 to 0.69 HKD, corresponding to a PE ratio of 6-7x for 2025 [3][4].

Investment Rating - The investment rating for the company is "Outperform the Market" [5][3][25] Core Views - The company experienced a revenue decline of 8.0% year-on-year in 2024, totaling 18.454 billion yuan, primarily due to weak offline foot traffic and channel restructuring. However, net profit showed resilience, increasing by 0.2% to 491 million yuan, supported by improved gross margin and effective cost management strategies [1][3][25] - The company is focusing on enhancing its online channels, with the proportion of revenue from all-channel sales rising to 28%, a year-on-year increase of 16%. Key drivers include a doubling of sales on Douyin and the integration of localized live streaming with national inventory [2][3][25] Summary by Sections Financial Performance - In 2024, the company achieved a gross margin of 34.2%, up 0.5 percentage points year-on-year, due to strict discount control and inventory optimization. Operating profit margin increased by 0.1 percentage points to 3.8%, while net profit margin rose by 0.3 percentage points to 2.7% [1][3][25] - The fourth quarter of 2024 saw a revenue decline of 3.2% year-on-year to 4.47 billion yuan, with net profit dropping 17.3% to 150 million yuan, attributed to the same factors affecting overall performance [1][2] Future Outlook - Management projects stable revenue and profit for 2025, with a target of maintaining revenue at the same level as 2024. The gross margin and operating profit margin are expected to remain stable, with a focus on adjusting the number of direct stores based on market trends [2][3][25] - The company plans to increase the all-channel revenue share to 30% and aims to open 100 new stores for new brands, which are expected to contribute positively to revenue [2][3] Valuation - The target price for the company is set between 0.59 and 0.69 HKD, corresponding to a price-to-earnings ratio (PE) of 6-7x for 2025. The net profit forecasts for 2025-2027 are 490 million, 540 million, and 600 million yuan, reflecting a growth of 0%, 11%, and 10% respectively [3][4][25]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 0.70, indicating a potential upside of 22.8% from the current price of HKD 0.57 [4][8]. Core Insights - The company is expected to see a marginal improvement in performance, with a high probability of earnings recovery in 2025. This is supported by a low valuation and an increased dividend yield, which provides significant upside potential compared to downside risks [8]. - The revenue trend is anticipated to reverse starting in the second quarter of 2024, with management expecting a return to healthier inventory levels in the industry by April. The company aims for its 2025 revenue to remain stable year-on-year [8]. - There is potential for a slight improvement in operating profit margins in 2025 due to expected retail discount improvements and increased sales of new products. However, the growth of e-commerce may continue to impact channel structure [8]. - The company is likely to maintain a high dividend payout ratio in 2025, with an expected dividend yield exceeding 10%, providing a safety net for the stock price [8]. Financial Forecasts - Revenue projections for the company are as follows: - 2023: RMB 20,064 million - 2024: RMB 18,454 million - 2025: RMB 18,592 million - 2026: RMB 19,272 million - 2027: RMB 19,782 million - The net profit attributable to shareholders is projected to increase from RMB 490 million in 2023 to RMB 684 million in 2027, reflecting a compound annual growth rate [3][10]. - The company’s price-to-earnings (P/E) ratio is expected to decrease from 5.6x in 2024 to 4.0x in 2027, indicating a more attractive valuation over time [3][10]. Market Performance - The company's stock has a 52-week price range of HKD 0.48 to HKD 0.69, with a current market capitalization of HKD 3,036 million [4][8]. - The average daily trading volume over the past three months is HKD 0.7 million, suggesting moderate liquidity in the stock [4].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 0.70, indicating a potential upside of 22.8% from the current price of HKD 0.57 [4][8]. Core Insights - The company is expected to see a marginal improvement in performance, with a high probability of earnings recovery in 2025. This is supported by a low valuation and an increased dividend yield, which provides significant upside potential compared to downside risks [8]. - The revenue trend is anticipated to reverse starting in the second quarter of 2024, with management expressing confidence in achieving year-on-year revenue growth in the latter half of 2024 [8]. - The operating profit margin for 2025 is projected to improve slightly due to better retail discounts and an increased sales proportion of new products, despite potential challenges from e-commerce growth affecting channel structure [8]. - The company is likely to maintain a high dividend payout ratio in 2025, with an expected dividend yield exceeding 10%, providing a safety net for the stock price [8]. Financial Forecasts - Revenue is forecasted to decline from RMB 20,064 million in 2023 to RMB 18,592 million in 2025, with a year-on-year change of -8% in 2024 and a slight recovery of 1% in 2025 [3][10]. - The net profit attributable to shareholders is projected to increase from RMB 490 million in 2023 to RMB 523 million in 2025, reflecting a significant growth of 450% in 2023, followed by modest growth rates in subsequent years [3][10]. - The price-to-earnings ratio is expected to decrease from 5.6x in 2023 to 4.0x in 2027, indicating a more attractive valuation over time [3][10]. Market Performance - The company's stock has a 52-week price range of HKD 0.48 to HKD 0.69, with a current market capitalization of HKD 3,036 million [4][6]. - The average daily trading volume over the past three months is HKD 0.7 million, suggesting moderate liquidity in the stock [4][6].

Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 0.90, indicating a potential upside of 53.3% from the current price of HKD 0.59 [1][2][7]. Core Insights - The report highlights that the company's profit margins have improved due to better discount control and operational efficiency, with a stable performance expected in 2025 [6]. - For 2024, the company anticipates a revenue decline of 8.0% to RMB 18.45 billion, but it expects to maintain a stable profit margin through cost control and efficiency improvements [6]. - The company plans to enhance its multi-channel strategy, including the introduction of new brands and digital transformation initiatives to capture new growth opportunities [6]. Financial Overview - Revenue projections for the company are as follows: RMB 20,064 million in 2023, RMB 18,454 million in 2024, and RMB 18,831 million in 2025, with a projected growth of 2.0% in 2025 [5][9]. - Net profit is expected to increase from RMB 490 million in 2023 to RMB 546 million in 2025, reflecting a growth rate of 11.1% [5][9]. - The company’s gross margin is projected to improve to 34.5% in 2025, up from 34.2% in 2024 [10]. Stock Performance - The stock has shown a year-to-date increase of 18.0% and has a market capitalization of approximately HKD 3,057.68 million [4][6]. - The stock's 52-week high and low are HKD 0.70 and HKD 0.48, respectively [4].

Investment Rating - The report assigns a "Buy" rating for the company, Baoshan International (3813 HK) [2][6][12] Core Insights - The company is expected to maintain stable performance in 2025, with revenue projected to be flat year-on-year. The average selling price is anticipated to grow slightly, while order volume is expected to remain stable [6][9] - The company has improved its profit margins through discount control and enhanced operational capabilities, despite a decline in revenue due to reduced foot traffic in physical stores [6][9] - The target price for the company has been adjusted down to HKD 0.90 from HKD 1.01, reflecting an 8x price-to-earnings ratio for 2025 [6][7] Financial Overview - Revenue is projected to decrease by 8.0% in 2024 to RMB 18,454 million, with a slight recovery expected in 2025 to RMB 18,831 million, representing a 2.0% year-on-year growth [5][9] - Net profit is expected to grow by 11.1% in 2025, reaching RMB 546 million, with earnings per share projected at RMB 0.11 [5][9] - The company’s gross margin is expected to improve to 34.5% in 2025, up from 34.2% in 2024, driven by effective inventory management and discount control [6][10] Stock Performance - The stock closed at HKD 0.59, with a potential upside of 53.3% to the target price of HKD 0.90 [1][7] - The stock has shown an 18.0% increase year-to-date [4] Market Position - The company is focusing on new brand development and enhancing its multi-channel strategy to adapt to market changes and capture new growth opportunities [6][9]

Financial Performance - For the fiscal year ending December 31, 2024, the company's revenue was RMB 18,453,923, a decrease of 8.0% compared to RMB 20,064,497 in 2023[3] - Gross profit for the same period was RMB 6,308,950, down 6.6% from RMB 6,755,980 in the previous year[3] - Operating profit decreased by 3.6% to RMB 709,226 from RMB 735,861 year-on-year[3] - The profit attributable to the company's owners was RMB 491,497, a slight increase of 0.2% from RMB 490,425 in 2023[3] - Total comprehensive income for the year was RMB 502,318, slightly up from RMB 502,102 in 2023[6] - The company's total revenue for 2024 was RMB 18,453,923,000, a decrease of 8.1% from RMB 20,064,497,000 in 2023[15] - Revenue from sports apparel and footwear sales was RMB 18,342,410,000, down 7.9% from RMB 19,946,875,000 in the previous year[15] - The company reported a net profit of RMB 491,497,000 for 2024, slightly up from RMB 490,425,000 in 2023[25] - The group's operating profit for 2024 decreased by 3.6% to RMB 709.2 million, with a slight increase in operating profit margin by 0.1 percentage points to 3.8%[48] - Financial income for 2024 was RMB 50.0 million, while financing costs decreased by 26.6% to RMB 67.8 million, benefiting from reduced interest expenses on lease liabilities[49] - The net profit for the year was RMB 497.8 million, with profit attributable to the company's owners at RMB 491.5 million, representing a profit margin of 2.7%, an increase of 0.3 percentage points year-on-year[50] Dividends - The company declared an interim dividend of HKD 0.02, an increase of 8.1% from HKD 0.0185 in 2023, while the proposed final dividend decreased by 16.7% to HKD 0.01 from HKD 0.0120[3] - The company declared a total dividend of RMB 243,624,000 for 2024, compared to RMB 87,883,000 in 2023[21] - The company declared an interim dividend of HKD 0.02 per share and a special dividend of HKD 0.02 per share, totaling approximately HKD 213.0 million for the six months ending June 30, 2024, compared to HKD 98.5 million for the same period in 2023[69] - The proposed final dividend for the fiscal year ending December 31, 2024, is HKD 0.01 per share and a special dividend of HKD 0.01 per share, totaling approximately HKD 106.5 million, subject to shareholder approval[69] - The total dividend for the year 2024 will be HKD 0.06 per share, with a payout ratio of 60%, compared to HKD 0.0305 per share and a payout ratio of 30% in 2023[69] Assets and Liabilities - Cash and cash equivalents decreased by 22.4% to RMB 1,419,052 from RMB 1,827,563 in 2023[3] - Inventory increased by 5.1% to RMB 4,946,314 compared to RMB 4,704,713 in the previous year[3] - The company's total assets decreased to RMB 9,407,623 from RMB 9,483,045 in the previous year[7] - The company's accounts receivable (net of provisions) stood at RMB 973,701,000, a slight decrease from RMB 978,919,000 in 2023[27] - Accounts payable decreased to RMB 971,990,000 from RMB 1,252,834,000 in the previous year, reflecting improved cash flow management[28] Market Environment and Strategy - The retail environment in China showed weak foot traffic, with a 0.3% year-on-year growth in retail sales for clothing and footwear, compared to a 3.5% overall retail growth[30] - The company continues to enhance its omnichannel capabilities, with significant growth in B2C public and private traffic channels, particularly a doubling in sales through Douyin live streaming[30] - The company plans to maintain its refined retail strategy and optimize store performance despite the challenging market conditions[30] - Online sales contributed approximately 28% to total sales in 2024, helping to offset the decline in foot traffic in physical stores[37] - The company achieved over 100% year-on-year growth in live-streaming sales, driven by enhanced operations and partnerships with brand partners[37] - The company continues to optimize its store layout and enhance digital capabilities to improve customer experience and operational efficiency[35] - The group plans to enhance its retail strategy by expanding its multi-brand outlet "Victory Warehouse" and improving customer experience through digital initiatives[59] - The group aims to expand its product categories and market segments, including opening new single-brand stores for Crocs and Saucony, and enhancing online and offline operations for the Korean yoga brand XEXYMIX[61] - The group anticipates the sports industry in the Greater China region to reach a market value of RMB 5 trillion by 2025, driven by government support and upcoming major sporting events[62] Employee and Governance - As of December 31, 2024, the group has approximately 20,000 employees, offering competitive compensation packages based on current market levels and individual performance[64] - The total number of shares granted under the share incentive plan is 133,721,810 shares, accounting for approximately 2.51% of the issued shares, with an additional 79,325,374 shares available for further grants, representing about 1.49% of the issued shares[65] - For the fiscal year ending December 31, 2024, a total of 22,000,000 incentive shares were granted, with 435,800 shares having lapsed or been canceled, and 4,711,400 shares having vested[66] - The board has applied the principles of the Corporate Governance Code and complied with all applicable code provisions and recommended best practices throughout the fiscal year[76] - The independent auditor, Deloitte, has reviewed the consolidated financial statements for the year ending December 31, 2024, confirming alignment with the figures approved by the board[75] - The board of directors includes executive directors Yu Huan Zhang (Chairman), Hu Jia He, and Chen Li Jie (CFO)[82] Operational Improvements - The implementation of a new SAP ERP system has strengthened the company's operational management and data analysis capabilities[41] - The company is focusing on strategic partnerships and digital member integration to enhance customer engagement and drive sales growth[38] - Capital expenditures increased to RMB 371.4 million in 2024 from RMB 344.2 million in 2023, focusing on new store openings and digital transformation strategies[55]

Investment Rating - The investment rating for the company is "Outperform the Market" [5][17][29]. Core Views - The report highlights a short-term improvement in profitability and sustained long-term growth momentum despite a weak retail environment affecting revenue growth. The company has managed to improve its profitability through strict discount control and healthy inventory management [2][17]. - The company’s online channel has shown robust growth, with a 13% increase in revenue, particularly driven by the Douyin platform, which saw a 100% year-on-year revenue increase [1][17]. - The company is strategically closing underperforming stores and upgrading others to enhance efficiency, resulting in a 14% decline in revenue from physical stores [1][17]. Summary by Sections Financial Performance - In Q3, the company's revenue decreased by 10.8% year-on-year to 4.0 billion CNY, while net profit attributable to shareholders increased by 40.0% to 0.1 billion CNY. The gross margin improved by 1.5 percentage points to 33.5% due to strict discount control [1][17]. - The company’s total sales and management expenses decreased by 7.8% year-on-year to 1.37 billion CNY, although the fixed cost ratio increased due to declining revenue [1][17]. - The company’s inventory increased by 12% year-on-year to 5.5 billion CNY, with inventory turnover days rising by 7 days to 152 days [1][17]. Future Outlook - The company expects a positive sales growth in October, with a 4.7% year-on-year increase in operating income to 1.72 billion CNY, attributed to the early Double Eleven promotional activities [1][17]. - The report projects net profits for 2024-2026 to be 4.9 billion CNY, 6.2 billion CNY, and 7.6 billion CNY, reflecting a slight downward adjustment from previous estimates [2][17]. - The target price has been adjusted to 0.59-0.69 HKD, corresponding to a 6-7x PE for 2024 [2][17].

Financial Performance - For the nine months ended September 30, 2024, the company reported unaudited consolidated profit attributable to owners of approximately RMB 343.0 million, an increase of 10.4% compared to RMB 310.6 million in the same period last year [2][5]. - The company's operating revenue for the same period was RMB 13,984.2 million, a decrease of 9.5% from RMB 15,443.7 million year-on-year [2][5]. - Operating profit for the nine months was RMB 513.6 million, a slight decrease of 0.4% from RMB 515.7 million in the previous year [2][5]. - Other comprehensive income for the period totaled RMB 3.85 million, compared to RMB 0.87 million in the previous year [3]. Profitability Metrics - The gross profit margin improved to 34.0%, up 0.9 percentage points from 33.1% in the previous year, primarily due to effective discount control and efficient inventory management [5]. - The net profit margin increased to 2.5%, up 0.4 percentage points from 2.1% in the previous year, reflecting improved cost management [5]. Financial Position - The company maintained a strong financial position with good net cash status as of September 30, 2024 [5]. Operational Strategy - The company continues to optimize store efficiency while enhancing the sales conversion rate of direct-operated physical stores amid challenging consumer traffic in mainland China [5]. - The company is advancing its digital transformation strategy, maintaining a relatively stable omnichannel sales performance [5]. Compliance and Reporting - The company has applied revised Hong Kong Financial Reporting Standards, which did not have a significant impact on the current or prior periods' unaudited consolidated results [4].

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 9,983,269 thousand, a decrease of 8.9% compared to RMB 10,960,001 thousand in 2023[4] - Gross profit for the same period was RMB 3,415,700 thousand, down 6.9% from RMB 3,670,684 thousand[4] - Operating profit increased by 2.1% to RMB 482,555 thousand, compared to RMB 472,818 thousand in the previous year[4] - Profit attributable to owners of the company rose by 9.9% to RMB 335,722 thousand, up from RMB 305,465 thousand[4] - The gross profit margin improved to 34.2%, an increase of 0.7 percentage points from 33.5%[4] - The operating profit margin also increased to 4.8%, up by 0.5 percentage points from 4.3%[4] - Basic earnings per share were RMB 6.48, reflecting a 9.8% increase from RMB 5.90[4] - Total comprehensive income for the period was RMB 342,575 thousand, compared to RMB 316,979 thousand in the previous year, reflecting an increase of 8.1%[12] - The net profit attributable to the owners of the company was RMB 335,722 thousand, up from RMB 305,465 thousand, representing an increase of 9.9%[11] - The net profit for the period was RMB 338.0 million, with a profit margin of 3.4%, an increase of 0.6 percentage points year-on-year[59] Cash Flow and Assets - For the six months ended June 30, 2024, the net cash generated from operating activities was RMB 873,308,000, a decrease from RMB 2,020,955,000 in the same period of 2023[19] - The net cash used in investing activities was RMB (754,500,000), compared to RMB (200,000,000) in the previous year[19] - The net cash used in financing activities totaled RMB (482,483,000), down from RMB (853,312,000) in the prior year[19] - Cash and cash equivalents decreased by 11.8% to RMB 1,611,830 thousand from RMB 1,827,563 thousand[5] - Non-current assets as of June 30, 2024, totaled RMB 3,843,575 thousand, up from RMB 3,774,628 thousand at the end of 2023[13] - Current assets decreased slightly to RMB 9,345,291 thousand from RMB 9,483,045 thousand, indicating a reduction of 1.5%[13] - The company's total assets as of June 30, 2024, were RMB 8,802,317,000, compared to RMB 8,894,587,000 at the end of the previous period[20] Dividends and Shareholder Information - The interim dividend declared was HKD 0.02, an increase of 8.1% from HKD 0.0185 in the previous year[4] - A special dividend of HKD 0.02 per share has also been declared, which was not paid in the previous period, bringing the total dividend to HKD 0.04 per share with a payout ratio of 60%[67] - The total number of issued shares as of June 30, 2024, is 5,326,179,615 shares[70] - The total number of shares held by the directors and key executives includes 19,523,000 shares by Cai Peijun, representing 0.37% of the issued shares[70] - The company will suspend the registration of shareholders from September 11, 2024, to September 13, 2024, for the purpose of dividend distribution[68] Operational Efficiency and Strategy - The company plans to continue its market expansion strategy, focusing on enhancing its product offerings and technological advancements[18] - The company has initiated a new strategy for mergers and acquisitions to strengthen its market position and diversify its portfolio[18] - The company's cash flow from operating activities indicates a need for improved operational efficiency to enhance profitability moving forward[19] - The group aims to enhance profitability through efficient measures, diversifying channel combinations, and rigorous cost control[43] - The company continues to invest in optimizing store layouts and enhancing digital transformation to improve customer experience and maintain a stable average transaction value[46] - The company upgraded its ERP system, implementing multiple SAP modules to integrate business and financial functions, enhancing operational efficiency[49] Market and Retail Environment - The retail environment in mainland China showed a 1.3% year-on-year increase in retail sales of clothing, footwear, and textiles, while total retail sales of consumer goods grew by 3.7%[43] - The group reported a 16.5% year-on-year increase in B2C public traffic channels, partially offsetting pressures faced in retail channels[43] - The sports industry in the Greater China region is projected to reach a market value of RMB 5 trillion by 2025, indicating significant growth potential despite short-term macroeconomic challenges[65] Share Incentive Plan - The company has a share incentive plan that was adopted on May 9, 2014, and has been extended for another ten years until May 8, 2034[76] - The total number of shares granted under the share incentive plan cannot exceed 4% of the total issued shares as of the grant date, which is 213,047,184 shares[78] - The total number of shares vested during the period is 3,507,400 shares[79] - The maximum number of shares that can be granted to each selected participant is limited to 1% of the issued shares, which is 53,261,796 shares[78] Compliance and Governance - The company has adhered to the principles of the Corporate Governance Code and complied with all applicable code provisions and recommended best practices during the reporting period[85] - The board has confirmed compliance with the standard code of conduct for securities trading throughout the six months ended June 30, 2024[86] - The audit committee has reviewed the unaudited condensed consolidated financial information for the six months ended June 30, 2024, discussing risk management, internal controls, and financial reporting matters[87] - The independent auditor has reviewed the group's unaudited financial information in accordance with the relevant standards[87]