NANSHAN FASHION(300918) Tai Ping Yang·2024-11-04 02:17Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative increase of over 15% compared to the CSI 300 index in the next six months [6][7]. Core Views - The company reported a revenue of 1.163 billion yuan for the first three quarters of 2024, reflecting a year-on-year increase of 3.52%. The net profit attributable to shareholders was 125 million yuan, up 3.83% year-on-year [2]. - In Q3 2024, the company experienced a revenue decline of 2.6% year-on-year, with a net profit decrease of 1.0% year-on-year. The apparel segment saw a 10% revenue growth, while the fine woolen fabric segment faced a decline of over 10% due to weak performance from end-brand apparel [2]. - The new materials business is expected to be a significant growth driver, with the ultra-high molecular weight polyethylene (UHMWPE) revenue increasing by 181% year-on-year in the first three quarters of 2024. The nylon project is on track for trial production in November 2024, which is anticipated to contribute to revenue and profit in 2025 [2]. Summary by Sections Financial Performance - For Q1-Q3 2024, the company reported a revenue of 1.163 billion yuan, a 3.52% increase year-on-year, and a net profit of 125 million yuan, up 3.83% year-on-year. In Q3 2024, revenue was 387 million yuan, down 2.6% year-on-year, with a net profit of 42 million yuan, down 1.0% year-on-year [2]. - The gross margin for Q3 2024 was 32.8%, a decrease of 2.3 percentage points year-on-year, primarily due to product structure changes [2]. Business Segments - The apparel segment achieved a 10% revenue growth in Q3 2024, driven by product design upgrades and improved customer structure. The fine woolen fabric segment, however, faced challenges with a revenue decline of over 10% due to weak end-market performance [2]. - The new materials segment, particularly UHMWPE, saw significant growth, with Q3 2024 revenue increasing by 103% year-on-year. The nylon project is progressing well, with full-scale production expected to begin in November 2024 [2]. Profitability Outlook - The report forecasts net profits of 211 million yuan, 247 million yuan, and 264 million yuan for 2024, 2025, and 2026, respectively, with corresponding price-to-earnings ratios of 17.34, 14.85, and 13.87 [4]. - The company is expected to maintain stable profitability despite short-term challenges in its main business, with a focus on high-value-added products and improvements in order structure anticipated to enhance profitability in the medium to long term [2].