Investment Rating - The report maintains a "Buy" rating for the company [1][2][6] Core Insights - The company reported a revenue of 12.98 billion, a year-on-year increase of 12%, and a net profit attributable to shareholders of 2.93 billion, a year-on-year increase of 38%, with revenue below expectations but profit exceeding expectations. The proposed cash dividend payout ratio is 59% [1] - Growth in sports products and the U.S. market was below average, impacting the average selling price (ASP), which was the main reason for revenue falling short of expectations. By product, revenue growth for sports, leisure, underwear, and other knitted products was 8%, 20%, 47%, and 12% respectively. By market, revenue growth in China, Europe, the U.S., Japan, and other markets was 20%, 4%, 3%, 27%, and 7% respectively, with Japan experiencing rapid growth due to increased demand for leisure and underwear clothing [1] - The gross margin significantly improved, leading to a notable increase in profitability. The gross margin for the first half of 2024 increased by 6.5 percentage points to 29%, primarily due to improved overall capacity utilization and increased production efficiency at overseas factories. The net profit margin increased by 4.2 percentage points to 22.6% [1] - The company is steadily expanding its overseas capacity, with the workforce at the new garment factory in Cambodia reaching 18,000, meeting planned expectations, and production efficiency continuing to improve. The Ho Chi Minh City garment factory in Vietnam has hired approximately 2,200 additional employees. The company has also acquired land use rights and production equipment in Vietnam to expand fabric production capacity [1] - With the gradual completion of inventory destocking by downstream overseas brands by the end of 2023, the company's revenue has returned to a growth trend in 2024, with capacity utilization quickly recovering and strong profitability, reflecting the company's adaptability to changing market conditions and its core competitive advantages. Looking ahead to the second half of 2024, it is anticipated that capacity utilization will remain at an ideal level, with further improvement in gross margin [1] Financial Forecast and Investment Recommendations - Based on the interim report, the profit forecast has been adjusted, and earnings per share for 2024-2026 are expected to be 3.99, 4.49, and 5.04 yuan respectively, with a DCF target valuation of 108.43 HKD [2][6]
申洲国际：毛利率和盈利超预期，海外产能稳步扩张