Core Viewpoint - The report from 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] Group 1: Financial Performance - The company's FY25 (July 2024 - June 2025) performance met CICC's expectations, with revenue of 5.55 billion yuan, a year-on-year increase of 4.6%, and a net profit attributable to shareholders of 890 million yuan, up 5.3% year-on-year [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] Group 2: Membership and Brand Growth - The number of member accounts with total purchases exceeding 5,000 yuan increased by about 20,000 to over 330,000 in FY25 [3] - Revenue from direct sales, distribution, and e-commerce channels in FY25 showed a year-on-year change of -6%, +10%, and +18%, respectively, with online sales benefiting from strong growth in the onmygame brand [3] - The company reduced its direct stores by 24 to 492, while increasing distribution stores by 116 to 1,625, converting some non-core city direct stores to distribution [3] - Revenue from the JNBY, jnby by JNBY, LESS, and Su Xie brands in FY25 showed year-on-year changes of +2.3%, +2.9%, +0.2%, and -4.6%, respectively, while new brands' revenue increased by 107.4% to 360 million yuan, mainly due to the consolidation and rapid growth of newly acquired brands onmygame and B1OCK [3] Group 3: Profitability and Inventory Management - The gross profit margin in FY25 decreased by 0.3 percentage points to 65.6%, primarily due to the increased proportion of revenue from distribution and online channels [4] - The selling expense ratio increased by 0.6 percentage points to 35.6% due to increased brand investment and expenses related to the 30th anniversary activities; the management expense ratio rose by 0.1 percentage points to 9.6% [4] - The effective tax rate decreased by 3.8 percentage points to 26.3% due to reduced withholding tax on dividends, resulting in a net profit margin attributable to shareholders increasing 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] Group 4: Future Development Trends - The company reiterated its goal of achieving 10 billion yuan in retail sales for FY26, with expectations of better terminal sales performance than peers in July and August [5] - The company is optimistic about its strong member loyalty and multi-brand cultivation capabilities, which are expected to lead to stable growth in performance [5] - The company plans to build its own logistics center, which is expected to reduce capital occupation and improve financial income net, leading to a faster revenue growth rate than profit growth in FY26 [5]
中金：维持江南布衣(03306)跑赢行业评级 升目标价至23.7港元