Core Viewpoint - CICC maintains the FY26 profit forecast for Jiangnan Buyi (03306) at 926 million yuan and introduces the FY27 profit forecast at 983 million yuan, with the current stock price corresponding to 10.1/9.7 times FY25/26 P/E ratio, maintaining an outperform rating for the industry [1] Financial Performance - The company reported FY25 (July 2024 - June 2025) performance: revenue of 5.55 billion yuan, up 4.6% year-on-year; net profit attributable to shareholders of 890 million yuan, up 5.3% year-on-year, in line with CICC's expectations [2] - The company declared a final dividend of 0.93 HKD per share, along with an interim dividend of 0.45 HKD per share, resulting in an annual payout ratio of approximately 75% [2] Membership and Brand Growth - The number of members with total purchases exceeding 5,000 yuan increased by about 20,000 to over 330,000 in FY25. Revenue from direct sales, distribution, and e-commerce channels grew by -6%/+10%/+18% to 2.08 billion, 2.27 billion, and 1.20 billion yuan respectively, with strong growth in online sales driven by onmygame [3] - The number of direct stores decreased by 24 to 492, while the number of distribution stores increased by 116 to 1,625, as the company converted some non-core city direct stores to distribution [3] - Revenue from brands JNBY, jnby by JNBY, LESS, and Su Xie grew by 2.3%/2.9%/0.2%/-4.6% to 3.01 billion, 830 million, 620 million, and 720 million yuan respectively, while revenue from emerging brands surged by 107.4% to 360 million yuan, mainly due to the consolidation and rapid growth of newly acquired brands onmygame and B1OCK [3] Profitability and Inventory Management - FY25 gross margin decreased by 0.3 percentage points to 65.6%, mainly due to the increased proportion of revenue from distribution and online channels [4] - FY25 selling expense ratio increased by 0.6 percentage points to 35.6%, primarily due to increased brand investment and expenses related to the 30th anniversary activities; management expense ratio rose by 0.1 percentage points to 9.6% [4] - The effective tax rate for FY25 decreased by 3.8 percentage points to 26.3%, mainly due to reduced withholding tax on dividends; overall, the net profit margin attributable to shareholders increased by 0.1 percentage points to 16.1% [4] - The inventory turnover days at the end of FY25 increased by 5 days to 161 days, mainly due to increased inventory and stocking for the 2024 autumn and winter seasons [4] Development Trends - The company reiterated its target of 10 billion yuan in retail sales for FY26, with expectations of better terminal sales in July-August compared to peers, driven by strong member loyalty and multi-brand cultivation capabilities [5] - The company plans to build its own logistics center, which is expected to reduce capital occupation and improve financial income net, leading to faster revenue growth than profit growth in FY26 [5]
中金：维持江南布衣跑赢行业评级 升目标价至23.7港元