Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [1]. Core Views - The company is a leading integrated knitted manufacturer in China, with a strong growth trajectory and solid partnerships with renowned clients such as NIKE, ADIDAS, and UNIQLO. The company has achieved a compound annual growth rate (CAGR) of 9.4% in revenue and 9.2% in net profit from 2014 to 2023 [2][7]. - The textile industry is experiencing a shift towards Southeast Asia for manufacturing, driven by labor cost advantages and tariff benefits. The global sportswear market is expected to grow significantly, with a projected CAGR of 6.6% from 2023 to 2028 [2][19]. - The company benefits from vertical integration, global capacity layout, and strong customer ties, which create high barriers to entry and ensure sustainable growth [2][19]. Summary by Sections Company Overview - The company is recognized as one of the largest vertically integrated knitted manufacturers globally, providing a range of products including sportswear, casual clothing, and undergarments. It has established stable partnerships with major clients, with a revenue increase from 11.15 billion yuan in 2014 to 24.996 billion yuan in 2023 [7][12]. Industry Analysis - The textile manufacturing industry is gradually shifting to Southeast Asia, with countries like Vietnam and Cambodia becoming key players due to favorable labor costs and government support. The sportswear market is expanding at a faster rate than other consumer goods, with a CAGR of 4.3% from 2010 to 2023 [17][27]. Competitive Advantages - The company employs a vertically integrated production model, which consolidates all manufacturing processes in one location, reducing logistics costs and improving profitability. In 2023, the company's net profit margin was 18.2%, outperforming peers [2][53]. - The company has a global production layout, with significant output from overseas factories, which accounted for 53% of total garment production in 2023. This diversification helps mitigate risks associated with reliance on a single market [19][40]. Financial Projections - The report forecasts the company's net profit for 2024-2026 to be 5.4 billion, 6.1 billion, and 6.99 billion yuan, respectively, with corresponding price-to-earnings (PE) ratios of 18X, 16X, and 14X [1][56].
申洲国际：国内一体化针织龙头，壁垒高筑行稳致远