Semir(SZ:002563) Guotai Junan Securities·2024-11-01 13:52Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 7.50 CNY, reflecting a price-to-earnings (PE) ratio of 16 times for 2024, which is above the industry average [5][3]. Core Insights - The company's Q3 revenue met expectations, but earnings fell short primarily due to lower gross margins and increased expense ratios. The company plans to continue expanding its store network, and with seasonal sales expected to improve, a stable growth in performance is anticipated for Q4 [2][3]. - For the first three quarters of 2024, the company reported revenue of 9.4 billion CNY, a year-on-year increase of 5.6%, while net profit attributable to shareholders was 760 million CNY, a decrease of 9.3% year-on-year. Q3 alone saw revenue of 3.44 billion CNY, up 3.2% year-on-year, but net profit dropped 36.0% to 200 million CNY [3][5]. Financial Summary - Revenue Forecast: The company expects revenues to grow from 13.66 billion CNY in 2023 to 17.31 billion CNY by 2026, with annual growth rates of 2.5%, 6.5%, 9.4%, and 8.8% respectively [1]. - Net Profit: Net profit attributable to shareholders is projected to increase from 1.12 billion CNY in 2023 to 1.49 billion CNY in 2026, with growth rates of 76.1%, 9.4%, 9.7%, and 10.4% respectively [1]. - Earnings Per Share (EPS): EPS is expected to rise from 0.42 CNY in 2023 to 0.55 CNY in 2026 [1]. - Return on Equity (ROE): The ROE is forecasted to improve from 9.8% in 2023 to 11.5% in 2026 [1]. Operational Insights - The company is actively increasing its inventory in preparation for the peak sales season, with a 14% year-on-year increase in inventory to 4.17 billion CNY by the end of Q3. This is attributed to preparations for winter sales, which are expected to perform well due to seasonal demand [3][2]. - The company has maintained a strong market position in the casual apparel sector, which supports its growth outlook despite recent earnings fluctuations [3].