Investment Rating - The report maintains a "Buy" rating for Huali Group (300979 SZ) [4] Core Views - Huali Group achieved revenue of RMB 6 039 billion in Q3 2024 a YoY increase of 18 5% with net profit attributable to shareholders of RMB 965 million a YoY increase of 16 1% [1] - The company sold 55 million pairs of sports shoes in Q3 2024 a YoY increase of 22 2% with ASP decreasing by 3 1% to RMB 109 8 due to product mix adjustments [2] - Gross margin in Q3 2024 was 27 01% slightly higher than 26 47% in Q3 2023 and net profit margin remained stable at 16 0% [2] - Operating cash flow for the first three quarters of 2024 increased by 31 55% YoY to RMB 4 251 billion driven by sales growth [2] - The new factory in Indonesia is in its initial production phase with capacity expected to ramp up over 1 5 to 2 years supporting future growth [2] - Huali Group's revenue growth outperformed peers such as Feng Tay (+10 5%) and Yue Yuen (+1 6%) in Q3 2024 [2] Financial Projections - Revenue is projected to grow from RMB 23 847 billion in 2024 to RMB 31 190 billion in 2026 with a CAGR of 13% [6] - Net profit attributable to shareholders is expected to increase from RMB 3 861 billion in 2024 to RMB 5 072 billion in 2026 with a CAGR of 14% [6] - EPS is forecasted to grow from RMB 3 31 in 2024 to RMB 4 35 in 2026 [6] - The company's P/E ratio is expected to decline from 20 4x in 2024 to 15 6x in 2026 reflecting strong earnings growth [6] Industry and Competitive Position - Huali Group is a leading footwear OEM with deep partnerships with international brands such as Nike and Puma [2] - The company's revenue growth in Q3 2024 outperformed its Taiwanese peers highlighting its competitive advantage in capacity and customer relationships [2] - The new factory in Indonesia is expected to further enhance the company's capacity and support its growth trajectory [2]
华利集团：24年三季报点评：延续高质量增长，期待新客户放量