Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 11.8 HKD, indicating an expected relative return of over 20% within six months [1]. Core Insights - The company has issued a positive profit forecast, expecting a year-on-year increase in net profit attributable to shareholders of 115%-120% for the first half of 2024, amounting to approximately 180-184 million USD [1]. - The significant profit increase is attributed to the recovery in the global footwear industry and strong demand for the company's manufacturing capacity, alongside a low base effect from the previous year [1]. - The company reported a net profit of 80-84 million USD for Q2 2024, reflecting a year-on-year growth of 143%-156% [1]. - The company has not incurred any capacity adjustment costs in the first half of 2024, contrasting with the previous year when such costs amounted to approximately 20 million USD [1]. - A one-time gain of about 24 million USD from the sale of part of its stake in an associate company positively contributed to the financial results [1]. Summary by Relevant Sections Financial Performance - The company expects revenues for FY24-26 to be 8.645 billion USD, 9.645 billion USD, and 10.935 billion USD, respectively [1]. - Net profits for the same periods are projected to be 380 million USD, 420 million USD, and 460 million USD [1]. - Earnings per share (EPS) are forecasted to be 0.24 USD, 0.26 USD, and 0.29 USD, with corresponding price-to-earnings (PE) ratios of 6x, 6x, and 5x [1]. Market Dynamics - The company is benefiting from a significant reduction in inventory pressure from its major client, Adidas, which reported a revenue of 5.82 billion EUR for Q2 2024, a year-on-year increase of 11% [1]. - As of June 30, 2024, Adidas' inventory was 4.54 billion EUR, down 17% year-on-year, which is favorable for the supply chain manufacturers like the company [1]. Operational Strategy - The company is enhancing operational resilience through flexible capacity scheduling and organized overtime plans, which have improved manufacturing capacity utilization and shipment volumes [1]. - The focus on cost reduction and efficiency improvement continues to drive profit growth, with plans to balance demand, order scheduling, and labor supply to enhance productivity [1].
裕元集团：业绩盈喜上半年高增