KORRUN(SZ:300577)2024-07-08 11:00Investment Rating - The report does not explicitly state an investment rating for the company Core Insights - The company operates primarily in two business segments: OEM manufacturing (B2B) and brand management (B2C) [1] - The OEM manufacturing segment has shown resilience and growth, with a CAGR of 24% from 2015 to 2023, while the brand management segment has struggled post-2020 [8][9] - The company has shifted its focus towards the more robust OEM manufacturing business, which accounted for 79% of revenue in 2023 [10] Business Overview - The company started as an IT bag OEM manufacturer and expanded into sports and leisure bags, acquiring key suppliers and extending production capacity [2][3] - The brand business, particularly the "90 Points" brand, gained traction through Xiaomi's ecosystem but faced significant challenges during the pandemic [4][5][8] - The brand business revenue peaked in 2019 but has not recovered to pre-pandemic levels, with 2023 revenue still below half of 2019 figures [8] Financial Performance - The OEM manufacturing revenue has consistently outperformed competitors, with 2023 revenue reaching 24.4 billion yuan [9] - The brand management revenue has fluctuated significantly, with a notable decline during the pandemic, leading to a 2023 revenue of only 6.3 billion yuan [9][10] - The company's gross margin for the OEM segment was 23.9% in 2023, while the brand segment improved to 26.6% [19] Capacity and Production - The company has expanded its production capacity significantly, with overseas capacity reaching 65% in 2023 [13][14] - The production capacity utilization rates have remained high, with domestic utilization at 97.7% and overseas at 79.9% in 2023 [12] Strategic Adjustments - The company has made strategic adjustments to focus on the more resilient OEM business and has increased its investment in garment manufacturing [10][64] - The company plans to acquire a 15.904% stake in Shanghai Jiale, a key player in the textile and apparel sector, to enhance its capabilities [49][55] Shareholder Returns - The company has faced challenges in providing shareholder returns, with a cumulative dividend of 2.4 billion yuan since its IPO, reflecting a low average dividend payout ratio of 22.7% [45][46] - The company's financial health is under scrutiny, with a significant portion of shares pledged by the controlling shareholder, indicating potential liquidity issues [76]