Core Viewpoint - CICC maintains a "outperform" rating for Shenzhou International (02313) while lowering the target price by 14.5% to HKD 69.89, reflecting a decrease in overall industry valuation [1] Group 1: 2024 Performance - The company reported a 15% increase in revenue to RMB 28.7 billion and a 37% increase in net profit to RMB 6.2 billion, exceeding CICC's expectations due to higher-than-expected revenue growth and a one-time gain from asset sales of RMB 337 million [2] - The company declared a final dividend of HKD 1.28 per share, totaling HKD 2.53 per share for the year, with a payout ratio of 55.8% [2] - CICC expects a 17% revenue growth in 2H24 driven by a 20% year-on-year increase in order volume, maintaining high growth trends despite rising bases [2] Group 2: Sales Performance by Brand and Region - Revenue growth for major brands in 2H24 is projected as follows: Uniqlo +32%, Nike -2%, Adidas +48%, Puma +23%, indicating Shenzhou's increasing market share among key clients [2] - Revenue growth by region for 2024 is expected to be: China +13%, Europe +3%, Japan +32%, USA +19% [2] - A slight decline of approximately 3% in RMB unit price is anticipated in 2H24 due to product mix and raw material price decreases, although this is an improvement from a 7% decline in 1H24 [2] Group 3: Profitability and Cost Control - Gross margin is expected to increase by 3.8 percentage points year-on-year to 28.1% for 2024, with 2H24 gross margin at 27.4%, benefiting from improved capacity utilization [3] - A slight decrease in gross margin quarter-on-quarter is attributed to increased employee numbers and wages, but the company believes there is significant room for future margin improvement [3] - Despite a reduction in government subsidies and foreign exchange gains totaling RMB 145 million, net profit still achieved a 37% growth due to favorable factors including a gain from asset disposal [3] Group 4: Future Capacity and Order Growth - The company plans to increase its workforce by 10,000 to 102,700 employees in 2024, with new factory recruitment in Cambodia starting in March 2025 for about 6,000 positions [4] - Order volume is expected to maintain double-digit growth in 2025, despite pressures from major client Nike, supported by healthy growth from other clients [4] - As employee efficiency improves, the management anticipates a stable increase in gross margin for 2025 [4]
中金：维持申洲国际(02313)跑赢行业评级 降目标价至69.89港元