Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 9,983,269, a decrease of 8.9% compared to RMB 10,960,001 for the same period in 2023[2] - Gross profit for the same period was RMB 3,415,700, down 6.9% from RMB 3,670,684 in 2023[2] - Operating profit increased by 2.1% to RMB 482,555 from RMB 472,818 year-on-year[2] - Profit attributable to owners of the company rose by 9.9% to RMB 335,722 compared to RMB 305,465 in the previous year[2] - Basic earnings per share increased to RMB 6.48, up 9.8% from RMB 5.90[2] - The total revenue for the group for the six months ended June 30, 2024, was RMB 9,983,269 thousand, down from RMB 10,960,001 thousand in the previous year, representing a decline of 8.88%[14] - The net profit attributable to the owners of the company for the six months ended June 30, 2024, was RMB 335,722 thousand, an increase of 9.88% compared to RMB 305,465 thousand for the same period in 2023[18] - Net profit attributable to the company's owners was RMB 335.7 million, with a net profit margin of 3.4%, up 0.6 percentage points year-on-year[37] Dividends - The company declared an interim dividend of HKD 0.02, an increase of 8.1% from HKD 0.0185 in 2023[2] - The company declared an interim dividend of HKD 0.02 per share for the six months ended June 30, 2024, compared to HKD 0.0185 per share for the same period in 2023[17] - The board has declared an interim dividend of HKD 0.02 per share, an increase from HKD 0.0185 per share in the previous period, along with a special dividend of HKD 0.02 per share[47] - The total dividend payout for the period amounts to HKD 0.04 per share, with a payout ratio of 60%[47] Assets and Liabilities - Inventory as of June 30, 2024, was RMB 4,649,992, a decrease of 1.2% from RMB 4,704,713 at the end of 2023[6] - Cash and cash equivalents decreased by 11.8% to RMB 1,611,830 from RMB 1,827,563[6] - Total assets as of June 30, 2024, were RMB 9,345,291, down from RMB 9,483,045 at the end of 2023[6] - Net assets attributable to owners of the company increased to RMB 8,802,317 from RMB 8,518,131 at the end of 2023[7] - The accounts receivable as of June 30, 2024, amounted to RMB 1,028,487 thousand, an increase from RMB 978,919 thousand as of December 31, 2023[22] - The accounts payable as of June 30, 2024, totaled RMB 1,089,804 thousand, a decrease from RMB 1,252,834 thousand as of December 31, 2023[23] Operational Efficiency - The total financing costs for the six months ended June 30, 2024, were RMB 35,380 thousand, a decrease of 28.54% from RMB 49,513 thousand in the same period of 2023[16] - The company reported a decrease in employee costs to RMB 1,092,906 thousand for the six months ended June 30, 2024, down from RMB 1,193,904 thousand in the previous year, reflecting a reduction of 8.45%[16] - The average inventory turnover period improved to 130 days, with inventory value decreasing from RMB 4,704.7 million to RMB 4,650.0 million[38] - The group aims to strengthen profit margins through operational excellence and digital transformation strategies[43] - The group is focusing on strategic partnerships and enhancing member integration plans to drive member growth and seasonal sales[30] - The group aims to streamline operations to improve labor efficiency, cost competitiveness, and shorten sales cycles, positioning itself for long-term growth opportunities[31] Market and Sales Performance - For the six months ended June 30, 2024, the revenue from sports apparel and footwear sales was RMB 9,924,029 thousand, a decrease of 8.93% compared to RMB 10,897,233 thousand for the same period in 2023[14] - For the six months ended June 30, 2024, the group's sales momentum slowed due to weak foot traffic in mainland China, with a year-on-year retail sales growth of only 1.3% in clothing, footwear, and textiles compared to a 3.7% increase in total retail sales[24] - The average selling price increased, partially offsetting the negative trend in same-store sales, while foot traffic in high-tier cities dropped by over 30% year-on-year[25] - The group's B2C public domain traffic channels saw a 16.5% year-on-year increase, helping to mitigate pressures faced by retail channels[24] - Online sales contributed approximately 26% to the total sales during the period, driven by public domain traffic channels[29] Store Operations - The number of directly operated stores decreased from 3,523 to 3,478, representing a net reduction of 45 stores during the period[27] - The number of stores with a sales area of 300 square meters or less accounted for 79.0% of total stores as of June 30, 2024, down from 80.3% the previous year[28] - The group continues to invest in optimizing store layouts and accelerating digital transformation to enhance consumer experience and maintain a stable average transaction value[28] - The group plans to open multiple new single-brand stores for Saucony, Hoka, Pony, and the Korean yoga brand XEXYMIX, which has an exclusive distribution agreement in mainland China[43] Technology and Innovation - The group has successfully implemented multiple SAP modules for its ERP system, enhancing operational efficiency and integrating business financial functions[31] - The group is expanding its SAP system for financial integration and optimization, enhancing operational efficiency through digital tools like an upgraded AI scheduling system[44] Employee and Governance - The group has approximately 20,700 employees as of June 30, 2024, offering competitive compensation packages and employee benefits[45] - The board of directors includes executive directors and independent non-executive directors, ensuring a diverse governance structure[54] - The company expresses gratitude to customers, suppliers, shareholders, and employees for their support and contributions during the reporting period[53] Future Outlook - The anticipated market value of the sports industry in the Greater China region is expected to reach RMB 5 trillion by 2025, highlighting growth potential[44] - The company will publish its mid-term report for 2024 according to the listing rules, which will be available on its website and the Hong Kong Stock Exchange website[53] - No purchases, sales, or redemptions of listed securities were made by the company or its subsidiaries during the six months ending June 30, 2024[49]

证券研究报告 | 2024年05月15日 宝胜国际（03813.HK） 买入 一季度收入下滑 7.5%，存货周转率提升 核心观点 公司研究·海外公司财报点评 第一季度收入下滑7.5%，毛利率基本持平。2024年第一季度受线下客流疲 纺织服饰·服装家纺 软影响，收入同比-7.5%至54.0亿元；归母净利润同比-20.9%至1.7亿元。 证券分析师：丁诗洁 证券分析师：刘佳琪 毛利率同比下降0.3个百分点至33.2%，负面因素主要因渠道结构变化，毛 0755-81981391 010-88005446 dingshijie@guosen.com.cnliujiaqi@guosen.com.cn 利率较低的加盟渠道占比提升,但另一方面直营店折扣同比改善低单位数， S0980520040004 S0980523070003 一定程度抵消渠道组合对毛利率的不利因素影响。基于费用管控得当，精简 基础数据 低效门店，雇员成本和租金开支下降，总人数同比下降14%，销售、管理费 投资评级 买入(维持) 用率分别同比持平和+0.2百分点，归母净利率仅下滑0.6百分点。 合理估值 0.77 - 0.88港元 收盘价 0.67港元 ...

Financial Performance - For the three months ended March 31, 2024, the company reported unaudited consolidated revenue of approximately RMB 5,400.3 million, a decrease of 7.5% compared to RMB 5,837.6 million in the same period last year[3][8] - The profit attributable to the company's owners for the same period was approximately RMB 174.4 million, representing a decline of 20.7% from RMB 220.0 million year-on-year[3][8] - Operating profit for the quarter was RMB 277.3 million, down 16.6% from RMB 332.7 million in the previous year[3][8] - The total comprehensive income for the period was RMB 182.7 million, down from RMB 229.6 million in the previous year[5][4] Profitability Metrics - The company's operating profit margin decreased by 0.6 percentage points to 5.1% compared to 5.7% in the previous year[8] - Net profit margin also saw a decline of 0.5 percentage points, falling to 3.4% from 3.9% year-on-year[8] Market Challenges - The company attributed the sales decline to weak foot traffic in stores across mainland China and high base effects from last year's "revenge spending" post-market reopening[7] Strategic Focus - Despite the challenges, the company maintained healthy profit margins due to effective discount control and cost reduction measures[7] - The company continues to focus on digital transformation strategies and agile operations to ensure sustainable growth and profitability[7] Financial Strength - The company reported strong net cash levels, indicating robust financial strength despite short-term challenges[7]

Financial Performance - Revenue for 2023 increased by 7.7% to RMB 20,064.5 million compared to RMB 18,638.0 million in 2022[4] - Net profit attributable to the company's owners surged by 450.0% to RMB 490.4 million from RMB 89.2 million in 2022[4] - Gross profit margin decreased by 2.2 percentage points to 33.7% in 2023 from 35.9% in 2022[4] - Operating profit margin improved by 1.5 percentage points to 3.7% in 2023 from 2.2% in 2022[4] - Revenue for 2023 increased by 7.7% to RMB 20,064.5 million compared to 2022[21][22] - Gross profit for 2023 was RMB 6,756.0 million, with a gross margin of 33.7%, down 2.2 percentage points from 2022[23] - Net profit attributable to shareholders surged by 450.0% to RMB 490.4 million in 2023[21][26] - Operating profit increased by 77.5% to RMB 735.9 million, with an operating profit margin of 3.7%, up 1.5 percentage points[25] - Revenue increased to RMB 20,064,497 thousand in 2023, up from RMB 18,638,021 thousand in 2022, representing a growth of approximately 7.7%[170] - Gross profit rose to RMB 6,755,980 thousand in 2023, compared to RMB 6,688,046 thousand in 2022, a slight increase of 1.0%[170] - Operating profit significantly improved to RMB 735,861 thousand in 2023, up from RMB 414,530 thousand in 2022, marking a 77.5% increase[170] - Net profit attributable to the company's owners surged to RMB 490,425 thousand in 2023, compared to RMB 89,164 thousand in 2022, a substantial increase of 450%[171] - Basic earnings per share increased to RMB 9.47 cents in 2023, up from RMB 1.72 cents in 2022, reflecting a 450% growth[171] - Total comprehensive income for the year reached RMB 502,102 thousand in 2023, compared to RMB 97,293 thousand in 2022, a 416% increase[172] Inventory and Cash Management - Inventory decreased by 22.5% to RMB 4,704.7 million in 2023 from RMB 6,071.9 million in 2022[5] - Cash and cash equivalents increased by 53.6% to RMB 1,827.6 million in 2023 from RMB 1,190.1 million in 2022[5] - Inventory turnover days improved significantly to 148 days in 2023 from 208 days in 2022[27] - Bank balances and cash increased to RMB 2,874.2 million at the end of 2023, up from RMB 1,190.1 million in 2022[28] - Net cash position rose to RMB 2,835.0 million at the end of 2023, compared to RMB 734.0 million in 2022[28] - Year-end cash and cash equivalents rose to RMB 1,827,563 thousand in 2023, up from RMB 1,190,148 thousand in 2022, indicating stronger liquidity[179] Debt and Financial Position - Bank borrowings decreased significantly by 91.4% to RMB 39.2 million in 2023 from RMB 456.2 million in 2022[5] - The company's debt-to-equity ratio improved to 0.5% at the end of 2023, down from 5.6% in 2022[28] - Non-current liabilities decreased to RMB 1,175,372 thousand in 2023 from RMB 1,464,196 thousand in 2022, primarily due to a reduction in lease liabilities[174] - Net asset value increased to RMB 8,610,581 thousand in 2023, up from RMB 8,193,920 thousand in 2022, reflecting growth in reserves[174] - Equity attributable to the company's owners rose to RMB 8,518,131 thousand in 2023, compared to RMB 8,114,253 thousand in 2022[174] Omnichannel Strategy and Digital Transformation - The company achieved a 22% rapid growth in its omnichannel strategy, focusing on higher-margin private traffic channels[9] - The company implemented the SAP system in early 2024 to integrate business and financial operations, enhancing decision-making efficiency[9] - The company's omnichannel sales, including WeChat stores, Douyin live streaming, and mall membership platforms, grew by over 22% year-on-year[12] - The company's omnichannel sales contributed approximately 27% to total sales in 2023, up from 24% in 2022[17] - The company's private traffic channels, including the WeChat store ecosystem, recorded strong sales growth in 2023[17] - The company's Douyin live streaming operations were upgraded in 2023, integrating regional and store-level localized operations[17] - The company's membership integration plan with brand partners introduced more value-added services, diversified content, and exclusive member benefits[17] - The company successfully implemented SAP modules in January 2024, enhancing operational efficiency and data integration[20] Dividend and Shareholder Returns - The company declared its first interim dividend since 2016, with a full-year dividend payout ratio of 30%[10] - The company paid an interim cash dividend of HKD 0.0185 per share for the six months ended June 30, 2023, totaling approximately HKD 87.9 million[51] - The company proposed a final cash dividend of HKD 0.0120 per share for the year ended December 31, 2023, totaling approximately HKD 63.9 million, subject to shareholder approval at the 2024 Annual General Meeting[51] - The company's dividend policy allocates 20% to 30% of distributable profits as dividends each fiscal year[145] Market and Consumer Trends - The "post-90s" generation is the largest consumer group in the outdoor sports market, accounting for 36.1%, with females making up 59.9%[11] - The compound annual growth rate (CAGR) of the global sports industry from 2023 to 2027 is expected to be 7%, with the Asia-Pacific region reaching 10%[11] - In 2023, China's apparel, footwear, and textile retail sales grew by 12.9% year-on-year, outperforming the overall retail sales growth of 7.2%[12] - The company expects the sports industry in Greater China to reach RMB 5 trillion by 2025, driven by government initiatives and the Paris Olympics[33] Corporate Governance and Leadership - The company operates 3,523 directly managed stores in Greater China as of December 31, 2023, with 79% of stores having a sales area of 300 square meters or less[14][16] - The company had approximately 22,100 employees as of December 31, 2023[34] - The company provides competitive compensation packages, including stock rewards and employee benefits such as social insurance and training programs[34] - Cai Peijun, aged 44, has been a non-executive director since April 2008 and is responsible for strategic planning and corporate development at Yue Yuen Group[38] - Li Yinan, aged 82, has been a non-executive director since March 2013 and has extensive experience in the footwear industry[39] - Chen Huanzhong, aged 68, has been an independent non-executive director since April 2008 and is a certified public accountant in Taiwan[40] - Feng Leiming, aged 66, has been an independent non-executive director since September 2018 and has extensive experience in the Hong Kong securities industry[41] - Liu Shiliang, aged 59, has been an independent non-executive director since March 2022 and has a strong background in finance and corporate strategy[42] - Wang Jun, aged 55, is the current CEO and has extensive experience in corporate strategy, marketing, and large-scale retail operations[43] - Zhang Shuqing, aged 59, is the Deputy General Manager overseeing the omni-channel platform and has over 20 years of experience in financial planning[44] - Song Hua, aged 49, is the Deputy General Manager responsible for retail operations and has extensive experience in corporate strategy and marketing[45] - Tang Guoxing, aged 57, is the Deputy General Manager in charge of brand and channel development and has extensive experience in corporate strategy and marketing[46] - Ye Yongming, aged 37, is the Company Secretary and CFO with over 10 years of experience in accounting, auditing, and financial management[47] - The Chairman and CEO roles were separated to ensure a balance of power and authority, with Mr. Yu Huanzhang leading the Board and Mr. Wang Jun managing daily operations[125] - The company appointed Mr. Chen Lijie as an Executive Director effective September 4, 2023, and Mr. Liao Yuanhuang resigned as an Executive Director on the same date[124][129] - All Independent Non-Executive Directors (INEDs) confirmed their independence, with Mr. Chen Huanzhong serving over nine years while maintaining independent judgment[126] - The Board held 5 meetings in 2023, with all Directors achieving 100% attendance except for Mr. Chen Lijie, who attended 2 out of 2 meetings[123] - The company provided two training sessions for Directors, covering updates on listing rules and insider information disclosure[128] - The Disclosure Committee did not hold formal meetings in 2023, instead handling matters via email and phone calls[124] - The company maintained compliance with Listing Rules by having at least three INEDs, one with professional accounting expertise[126] - The Nomination Committee considers diversity factors such as gender, age, and professional background when evaluating Board candidates[127] - Mr. Liao Yuanhuang resigned as an executive director, effective from September 4, 2023[130] - The Audit Committee held four meetings during the year[132] - The Remuneration Committee held three meetings during the year[133] - The Nomination Committee held one meeting during the year[134] - As of December 31, 2023, one out of eight directors was female (approximately 13%)[135] - The Board's current composition includes 38% with academic backgrounds in economics/finance/accounting and 63% with professional accounting expertise[137] - The Board's diversity policy includes considerations of gender, age, cultural background, professional qualifications, and industry experience[137] - The Audit Committee reviewed and recommended the approval of the Group's quarterly results, interim and annual reports[132] - The Remuneration Committee reviewed and recommended the remuneration packages for executive directors, CFO, and CEO[133] - The Nomination Committee recommended the appointment of an executive director and reviewed the re-election of directors at the 2023 AGM[134] - The company's board of directors includes executive directors such as Yu Huanzhang (Chairman), Hu Jiahe, and Chen Lijie (CFO, appointed on September 4, 2023)[79] - The company has arranged appropriate directors' and officers' liability insurance for its directors and senior personnel[83] - No significant transactions, arrangements, or contracts involving the company's directors or controlling shareholders were reported during the year[84] - The company's shareholders eligible to attend and vote at the 2024 Annual General Meeting must complete registration by May 20, 2024[71] - Shareholders eligible for the proposed final dividend must complete registration by June 3, 2024, with the dividend to be paid on June 21, 2024[72] - The company's directors and senior management have disclosed their interests in shares, related shares, and bonds as of December 31, 2023[85] - The total number of issued shares of the company as of December 31, 2023, is 5,326,179,615 shares[86] - Cai Peijun holds 19,523,000 shares, representing 0.37% of the issued shares[86] - Yu Huanzhang holds 1,200,000 shares, representing 0.02% of the issued shares[86] - Wang Jun holds 3,748,040 shares, representing 0.07% of the issued shares[86] - The total number of issued shares of Yuen Industrial (Group) Limited as of December 31, 2023, is 1,612,183,986 shares[89] - Yu Huanzhang holds 120,000 shares of Yuen Industrial, representing 0.01% of the issued shares[89] - Hu Jiahe holds 380,000 shares of Yuen Industrial, representing 0.02% of the issued shares[89] - Yuen Industrial holds an indirect equity interest of approximately 62.55% in the company[91] - The company's share incentive plan involves existing shares and does not involve the issuance of new shares[93] - The share incentive plan is designed to reward and retain key personnel, with awards subject to performance and vesting conditions[93] - The total number of shares awarded under the Share Award Scheme is 111,721,810 shares, representing approximately 2.10% of the issued shares, with an additional 101,325,374 shares available for further awards, representing approximately 1.90% of the issued shares[94] - The maximum number of shares that can be awarded under the Share Award Scheme is 213,047,184 shares, which is 4% of the total issued shares (5,326,179,615 shares)[94] - The weighted average closing price of the shares immediately before the vesting date of the awarded shares during the year was HK$0.68 per share[95] - The total number of shares awarded to employees during the year was 6,579,000 shares, with 4,147,200 shares remaining unvested as of December 31, 2023[95] - The total number of shares awarded to the five highest-paid individuals during the year was 1,236,000 shares, with 772,500 shares remaining unvested as of December 31, 2023[95] - The largest shareholder, Li Shang Management Limited, holds 3,331,551,560 shares, representing 62.55% of the issued shares[100] - The total number of issued shares as of December 31, 2023, is 5,326,179,615 shares[100] - Yuen Holdings owns 3,331,551,560 shares through its wholly-owned subsidiary Li Shang[101] - Wealthplus and Win Fortune hold 47.95% and 3.16% of Yuen's voting shares respectively, both are wholly owned by Pou Chen[101] Risk Management and Internal Controls - The company has established a risk management framework with policies and procedures to identify, assess, manage, and minimize risks that could adversely affect the group's business objectives[151] - The audit committee reviews the group's financial controls, risk management, and internal control systems quarterly and reports significant findings to the board[150] - The internal risk management committee is responsible for establishing and continuously modifying the risk management system, identifying and estimating risks, and managing, monitoring, and controlling risks[152] - The risk management unit executes the risk management system, coordinates with the internal risk management committee, implements risk mitigation measures, and arranges risk management training[152] - Functional and operational units facilitate communication with the risk management unit, guide and coordinate risk management work, and identify, assess, and review risk mitigation measures[152] - The company's risk management and internal control systems were deemed effective and adequate as of December 31, 2023[155] - The company's risk assessment process includes four core stages: risk identification, risk assessment, risk response, and risk monitoring and reporting[153][154] - The company has established procedures to handle and disclose insider information in compliance with securities and futures regulations[156] - The audit committee oversees the effectiveness of the Whistleblowing Policy and monitors actions taken in response to reported concerns[157] - The company's internal audit department reviews the effectiveness of risk mitigation plans and risk management activities[154] - The company's anti-bribery policy, adopted in March 2022, promotes high standards of business ethics and compliance with anti-corruption laws[158] - No corruption-related lawsuits against the company or its employees were concluded during the year[158] - The company adopted a "Whistleblowing Policy" in March 2022 to encourage reporting of fraud, misconduct, or violations[157] - The company has a zero-tolerance policy towards bribery in any form across all jurisdictions where it operates[158] Sustainability and ESG - The company has established a sustainability team and an ESG task force to manage environmental risks, and has implemented measures to reduce carbon emissions, particularly in energy conservation[58] - The company has implemented a climate change policy to assess, identify, and manage climate-related risks and opportunities, aiming to reduce energy and resource consumption[64] - The company follows local environmental laws and adopts environmental policies of the brands it distributes, ensuring low emissions and optimized waste management across the value chain[64] - The company has established dedicated units, such as the Sustainability Team and ESG Task Force, to achieve better ESG ambitions and become a sustainable enterprise[64] - The company's total donations for the year amounted to approximately RMB 1.1 million (2022: RMB 0.5 million)[73] Operational Efficiency and Cost Management - Sales and distribution expenses decreased to 27.9% of revenue in 2023, down from 31.2% in 2022[24] - Capital expenditure increased to RMB 344.2 million in 2023, up from RMB 311.6 million in 2022[30] - Committed but not yet provided capital expenditure for property, machinery, and equipment was RMB 63.6 million as of December 31, 2023[30] - Future undiscounted cash flows for new leases with an average irrevocable period of 1 to 3 years amounted to RMB 5.7 million as of December 31, 2023[30] - The company has no significant contingent liabilities as of December 31, 2023[30] - The company does not use significant hedging financial instruments for foreign exchange risk[31] - The company aims to prioritize profit margins and pursue quality growth in 2024[32] - The company plans to enhance profitability through digital transformation, dynamic inventory control, and efficient working capital management[32] - The company has made significant investments in technology infrastructure, including the adoption of a new

Investment Rating - The investment rating for the company is "Buy" [1][4][19] Core Views - The company has shown a significant recovery in revenue and profit in 2023, with a revenue increase of 7.7% to 20.06 billion CNY and a net profit growth of 450.6% to 490.4 million CNY [1][5][19] - The gross margin has decreased by 2.2 percentage points to 33.7%, primarily due to the strategy of clearing old inventory and an increase in the proportion of lower-margin franchise channels [1][5] - The operating profit margin improved by 1.5 percentage points to 3.7%, and the net profit margin increased by 2.0 percentage points to 2.4%, reaching the highest level since the pandemic in 2020 [1][5][19] Summary by Sections Financial Performance - In Q4 2023, revenue increased by 8.9% to 4.62 billion CNY, and the net profit turned positive to 180 million CNY [1][11] - The company implemented strict discount controls and improved inventory structure, leading to a Q4 gross margin increase of 0.3 percentage points to 35.7% [1][11] - The operating profit margin in Q4 rose by 3.1 percentage points to 4.8%, and the net profit margin increased by 4.1 percentage points to 3.9% [1][11] Store Efficiency and Growth - The company optimized its store network, reducing the number of stores but improving store efficiency, with same-store sales growth of 12.1% in Q4 [1][14] - The number of direct stores decreased by 570, but the proportion of high-quality large stores increased by 2 percentage points to 21% [1][14] - The "Fanwei" store concept saw a strong revenue growth of 40%, contributing 13.4% to total revenue and 23% to offline direct sales in Q4 [1][17] Future Outlook - The company expects continued improvement in operating profit margins over the next three years, with projections for gross margin and operating profit margin to increase by 1 percentage point in 2024 [1][18][19] - The company aims to maintain a healthy inventory level with an expected inventory turnover of around 150 days in 2024 [1][18] - The overall sales strategy will focus on enhancing both online and offline channels, with an emphasis on optimizing brand structure and introducing new partnerships [1][18]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 0.8, representing a potential upside of 19.4% from the current price of HKD 0.67 [1][2][10]. Core Insights - The company is expected to see an improvement in profit margins in 2024 driven by better channel structure and retail discount stability, despite a challenging demand environment [1]. - The focus for 2024 will be on stabilizing retail discounts and improving profit margins, with a target of maintaining overall revenue flat while achieving a 1 percentage point increase in both gross and operating profit margins [1]. - The company aims for a long-term operating profit margin expansion of 1 percentage point annually, targeting a 7% margin by 2026 [1]. Financial Performance Summary - **Revenue Forecast**: The company’s revenue is projected to decline slightly by 1% in 2024, following an 8% increase in 2023 [2][5]. - **Net Profit**: The net profit is expected to increase by 28% in 2024, reaching RMB 626 million, following a significant recovery from a low base in 2023 [2][5]. - **Profitability Ratios**: The operating profit margin is forecasted to expand to 4.2% in 2024, up from 3.7% in 2023, with a long-term goal of 5% by 2026 [5][7]. - **Valuation Metrics**: The company is trading at a P/E ratio of 5.1 for 2024, indicating a relatively low valuation compared to historical levels [2][5]. Channel and Inventory Management - The company has successfully reduced inventory levels to a healthier state, which is expected to positively impact gross margins in 2024 [1]. - There has been a shift towards improving the channel structure, with a decrease in the wholesale and B2B channel revenue contribution, while B2C sales are anticipated to grow [1]. Store Performance - The company closed 570 stores in 2023, resulting in a 14% reduction in the number of direct-operated stores, but managed to achieve a 1% revenue growth in these stores, indicating improved single-store performance [1][6]. - The performance of existing stores will be crucial in determining whether the company can exceed its revenue targets for 2024 [1].

交银国际研究 公司更新 消费 收盘价 目标价 潜在涨幅 2024年3月15日 港元0.67 港元1.46 +117.9% 宝胜国际 (3813 HK) 价值被大幅低估；净现金占市值的 90%，并宣布恢复派息  2023 年业绩与正面盈利预告相符：2023 年销售额同比增长 7.7%至 200.64 亿 个股评级 元人民币，净利润同比增长 450%至 4.90 亿元人民币，净利润率扩大至 2.4% 买入 （2022 年为 0.5%）。2023 年第 4 季度销售额从-20%的低基数上同比增长 8.9%，净利率提高至 2.4%（2022年同期为-0.2%），净利润为 1.13 亿元人民 币。 1年股价表现  阿迪达斯业绩解读的正面投资启示： 阿迪达斯 2023 财年业绩（同日发布） 3813 HK 恒生指数 对宝胜是正面的：1）对中国市场信心增强： 阿迪达斯集团 2023 年在中国的 20% 15% 销售额增长了 8%（阿迪达斯品牌增长了 14%），称其中国管理团队 "信心持 10% 续增加"，并"干劲十足"，正在恢复所有营销活动，并在2024年售卖新任首 5% 0% 席执行官上台后令人振奋的新产品；2）中国 ...

Financial Performance - For the fiscal year ended December 31, 2023, the total revenue reached RMB 20,064,497 thousand, representing a 7.7% increase from RMB 18,638,021 thousand in 2022[2] - The operating profit surged by 77.5% to RMB 735,861 thousand, compared to RMB 414,530 thousand in the previous year[2] - The profit attributable to the owners of the company increased significantly by 450.0% to RMB 490,425 thousand, up from RMB 89,164 thousand in 2022[2] - The basic earnings per share rose to RMB 9.47, a remarkable increase of 450.6% from RMB 1.72 in the prior year[2] - Total comprehensive income for the year amounted to RMB 502,102 thousand, compared to RMB 97,293 thousand in 2022[5] - The company achieved a significant increase in net profit attributable to shareholders, rising 450.0% to RMB 490.4 million[36] - The gross profit for 2023 was RMB 6,756.0 million, with a gross margin of 33.7%, down 2.2 percentage points from 35.9% in 2022[39] - The operating profit increased by 77.5% to RMB 735.9 million, with an operating margin of 3.7%, up 1.5 percentage points year-on-year[41] - The company recorded a net profit of RMB 503.2 million in 2023, a significant increase of 402.0% compared to the fiscal year 2022[43] Cash and Assets - Cash and cash equivalents increased by 53.6% to RMB 1,827,563 thousand, compared to RMB 1,190,148 thousand in 2022[2] - The net asset value increased to RMB 8,610,581 thousand, up from RMB 8,193,920 thousand in the previous year[7] - As of December 31, 2023, the company's cash and bank balances reached RMB 2,874.2 million, up from RMB 1,190.1 million in 2022, while total bank borrowings decreased by 91.4% to RMB 39.2 million[45] - The net cash level increased significantly to RMB 2,835.0 million in 2023, compared to RMB 734.0 million in 2022[45] Dividends and Shareholder Information - The company proposed a final dividend of HKD 0.0120 per share, with an interim dividend of HKD 0.0185 per share declared earlier[2] - The company declared an interim dividend of HKD 0.0185 per share for 2023, compared to HKD 0.016 per share in 2022, reflecting an increase of about 9.38%[20] - The company proposed a final dividend of HKD 0.0120 per share for the year ending December 31, 2023, amounting to approximately HKD 63.9 million, pending approval at the 2024 Annual General Meeting[54] - A total of 5,227,200 shares remain subject to vesting conditions as of December 31, 2023[52] - The company will suspend shareholder registration from May 21, 2024, to May 24, 2024, to determine eligibility for attending the 2024 Annual General Meeting[55] - The company will also suspend shareholder registration from June 4, 2024, to June 7, 2024, to determine eligibility for the proposed final dividend[56] - The 2024 Annual General Meeting is scheduled for May 24, 2024[53] Operational Efficiency and Cost Management - The company continues to focus on enhancing operational efficiency and sustainable growth through rigorous cost control and inventory optimization strategies[27] - The total employee costs for the year amounted to RMB 2,279,994,000, down from RMB 2,425,598,000 in 2022, indicating a reduction of approximately 6%[1] - The company’s total sales and distribution expenses were RMB 5,588.2 million, accounting for 27.9% of total revenue, a decrease from 31.2% in 2022[40] - The average inventory turnover period improved to 148 days in 2023, down from 208 days in 2022, with inventory amount decreasing from RMB 6,071.9 million to RMB 4,704.7 million[44] Digital Transformation and Sales Growth - The company is focused on digital transformation, including the implementation of an upgraded ERP system to enhance operational efficiency[35] - The company continues to invest in optimizing store layouts and integrating digital services to enhance consumer experience and drive higher average transaction values[31] - Online sales contributed approximately 27% to total sales in 2023, up from 24% in 2022, indicating a strong trend in digital sales[32] - The company's sales through all channels, including online platforms, recorded an annual growth of over 22%, demonstrating the effectiveness of its digital transformation efforts[27] - The company’s private traffic channels recorded strong sales growth, contributing to offline direct retail sales[32] Market and Industry Insights - The sports industry in the Greater China region is expected to reach a market value of RMB 5 trillion by 2025, driven by government initiatives and upcoming events like the Paris Olympics[50] - The retail sales of clothing, footwear, and textiles in China grew by 12.9% year-on-year in 2023, outperforming the overall retail sales growth of 7.2%[27] Compliance and Governance - The company has complied with all applicable corporate governance codes and best practices throughout the year ending December 31, 2023[60] - The independent auditor, Deloitte, confirmed that the consolidated financial statements for the year ending December 31, 2023, align with the figures approved by the board on March 13, 2024[59] - The company has adopted the standard code for securities transactions by directors and confirmed compliance throughout the year ending December 31, 2023[61] Store Operations - The total number of direct-operated stores in Greater China decreased to 3,523 by December 31, 2023, from 4,093 at the beginning of the year, a net reduction of 570 stores[30] - The company continues to invest in optimizing store layouts and integrating digital services to enhance consumer experience and drive higher average transaction values[31]

Financial Performance - For the nine months ended September 30, 2023, the company reported unaudited consolidated profit attributable to owners of approximately RMB 310.6 million, an increase of 214.8% compared to RMB 98.6 million in the same period last year [3][8]. - Revenue for the same period was approximately RMB 15,443.7 million, representing a year-on-year increase of 7.3% from RMB 14,393.6 million [7][8]. - Operating profit increased by 50.5% to RMB 515.7 million, up from RMB 342.6 million in the previous year [8]. - The operating profit margin improved to 3.3%, an increase of 0.9 percentage points from 2.4% in the prior year [8]. - Net profit margin rose to 2.1%, up 1.3 percentage points from 0.8% in the previous year [8]. - Other comprehensive income for the period totaled RMB 866, compared to a loss of RMB 2,574 in the previous year [5]. - Total comprehensive income for the period was RMB 328.4 million, significantly higher than RMB 108.1 million in the same period last year [5]. Business Environment and Strategy - The company benefited from a recovery in sales environment and increased foot traffic in retail stores across mainland China, contributing to improved sales trends [7]. - The strong performance of the omnichannel retail ecosystem supported the company's refined retail strategy and digital transformation efforts [7]. - The company implemented cost control measures that enhanced profitability during the reporting period [7].

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 10,960,001 thousand, an increase of 11.1% compared to RMB 9,864,815 thousand in 2022[4] - Gross profit for the same period was RMB 3,670,684 thousand, reflecting a growth of 5.0% from RMB 3,495,946 thousand[4] - Operating profit surged to RMB 472,818 thousand, marking a significant increase of 127.0% from RMB 208,329 thousand in the previous year[4] - Profit attributable to owners of the company reached RMB 305,465 thousand, a remarkable increase of 1,654.2% compared to RMB 17,413 thousand in 2022[4] - Basic earnings per share for the period was RMB 5.90, up 1,635.3% from RMB 0.34 in the same period last year[4] - The company's profit for the six months ended June 30, 2023, was RMB 318,967,000, a significant increase from RMB 24,187,000 in the same period of 2022, representing a growth of 1,320%[13] - Total comprehensive income for the same period was RMB 316,979,000, compared to RMB 22,305,000 in 2022, marking an increase of 1,320%[13] - The company's net profit for the period was RMB 319.0 million, a significant increase of 1,218.8% compared to the same period last year[66] Cash Flow and Liquidity - Cash and cash equivalents increased by 70.1% to RMB 2,024,918 thousand from RMB 1,190,148 thousand[5] - The company's cash and cash equivalents as of June 30, 2023, amounted to RMB 2,024,918,000, up from RMB 1,190,148,000 at the end of 2022, reflecting a growth of 70%[14] - The net cash generated from operating activities for the six months ended June 30, 2023, was RMB 2,020,955 thousand, a significant increase from RMB 324,083 thousand in the same period of 2022[19] - The total cash and cash equivalents at the end of the period were RMB 2,024,918 thousand, up from RMB 1,236,716 thousand a year earlier[20] - The company reported a significant increase in cash flow from operating activities, indicating improved operational efficiency[19] - The company’s cash flow management strategies appear to be effective, as evidenced by the substantial increase in cash and cash equivalents[20] Inventory and Assets - Inventory decreased by 23.1% to RMB 4,672,120 thousand from RMB 6,071,858 thousand[5] - Non-current assets decreased from RMB 4,183,153,000 at the end of 2022 to RMB 3,790,219,000 as of June 30, 2023, a decline of approximately 9.4%[14] - The company's inventory decreased from RMB 6,071,858,000 at the end of 2022 to RMB 4,672,120,000, a decline of about 22.9%[14] - The average inventory turnover period improved significantly to 133 days in H1 2023, down from 202 days in H1 2022, with inventory value decreasing from RMB 6,071.9 million to RMB 4,672.1 million[67] Debt and Liabilities - Bank borrowings significantly reduced by 79.8% to RMB 91,991 thousand from RMB 456,162 thousand[5] - Current liabilities decreased from RMB 3,940,745,000 at the end of 2022 to RMB 3,384,711,000, a reduction of about 14.1%[15] - The net asset value of the company increased from RMB 8,193,920,000 at the end of 2022 to RMB 8,512,357,000, an increase of approximately 3.9%[15] - The company's equity attributable to owners increased from RMB 8,114,253,000 at the end of 2022 to RMB 8,419,188,000, reflecting a growth of approximately 3.8%[15] - The group's debt-to-equity ratio was 1.1% as of June 30, 2023, down from 5.6% as of December 31, 2022, indicating improved financial stability[68] Dividends - The company declared an interim dividend of HKD 0.0185 per share, not applicable in the previous year[4] - The interim dividend declared for the six months ended June 30, 2023, is HKD 0.0185 per share, totaling HKD 98,534,000, compared to no dividend in the same period of 2022[34] - The board declared an interim dividend of HKD 0.0185 per share for the six months ended June 30, 2023, compared to no dividend in the same period last year[74] Operational Efficiency - The company aims to enhance operational efficiency and customer interaction while focusing on sales conversion rates and seasonal full-price sales[50] - The company continues to optimize its physical store network while strengthening online traffic channels to improve cash turnover efficiency[50] - The company has continued to invest in optimizing its store layout and integrating digital services to enhance consumer experience and increase average transaction value[54] - The company is focusing on enhancing its digital operations and has invested in upgrading its ERP and business intelligence systems to drive operational excellence[58] - The private traffic channel recorded strong sales growth, contributing to improved sales conversion rates and shorter sales cycles[55] Market Performance - Revenue from sports apparel and footwear sales reached RMB 10,897,233,000 for the six months ended June 30, 2023, a 10.1% increase from RMB 9,807,723,000 in the same period of 2022[30] - Retail sales in the apparel, footwear, and textile categories in China grew by 12.8% year-on-year in the first half of 2023, outperforming the overall retail sales growth of 8.2%[50] - Online sales contributed approximately 25% to total sales, up from 21% in the same period last year, indicating a strong recovery in online sales channels[55] Employee and Governance - The group has approximately 23,700 employees as of June 30, 2023, representing a year-on-year decrease of 17.1%[73] - The company has complied with all applicable code provisions and recommended best practices in the Corporate Governance Code during the reporting period[92] - The company has adopted the standard code of conduct for securities transactions by directors and confirmed compliance during the reporting period[93] Accounting and Reporting - The application of revised Hong Kong Financial Reporting Standards did not have a significant impact on the financial position or performance of the group during the interim period[24] - The group’s financial statements are prepared in accordance with the Hong Kong Accounting Standards and the relevant disclosure requirements of the Hong Kong Stock Exchange[21] - The independent auditor, Deloitte, reviewed the unaudited consolidated financial information for the six months ending June 30, 2023[94]