Core Viewpoint - Company is initiating coverage on Crystal International with a "Buy" rating and a target price of HKD 7.38, corresponding to a 12x PE for 2025 [1] Group 1: Company Overview - Crystal International is a leading global garment manufacturer with over 20 factories in Vietnam, China, Cambodia, Bangladesh, and Sri Lanka, benefiting from ample overseas production capacity [1] - The company has a long-standing partnership with Uniqlo, spanning nearly 30 years, which supports stable revenue growth [3] Group 2: Market Position and Strategy - The global sportswear market is projected to grow at a CAGR of 6.3% from 2024 to 2028, reaching USD 313.1 billion, indicating a favorable environment for the company [2] - Crystal International has entered the sportswear segment through the acquisition of Vista in 2016 and is now supplying major clients like Adidas, Nike, and Lululemon, which enhances its market share [2] Group 3: Financial Performance and Projections - The company's revenue share from sportswear is expected to increase from 9.6% in 2018 to 22.5% in 2024, with gross margin improving from 18.6% to 19.7% during the same period [3] - The company plans to increase its workforce by 10,000 to a total of 75,000 employees, maintaining a high productivity level of USD 33,000 per employee [3] Group 4: Competitive Advantage - Crystal International's "Co-creation" model enhances its ODM capabilities, allowing for deeper involvement in client design processes, which strengthens customer loyalty and market share [2] - The company benefits from a global production footprint and a high percentage of overseas employees (84%), positioning it well to capitalize on the trend of concentrated sportswear suppliers [3] Group 5: Valuation and Earnings Forecast - The company forecasts net profits to grow by 15.7%, 15.1%, and 11.6% from 2025 to 2027, reaching USD 230 million, USD 270 million, and USD 300 million respectively [4] - A target price of HKD 7.38 is set based on a 12x PE for 2025, reflecting a slight discount due to the company's later entry into the high-growth segment [4]
晶苑国际(2232.HK)：全球成衣代工龙头 垂直布局成长可期