Semir(002563) 广发证券·2024-11-07 10:43Company Rating - Buy rating with a current price of 6.09 yuan and a fair value of 7.04 yuan [1] Core Views - The company is a dual leader in domestic casual wear and children's wear, with the Semir brand being the top local casual wear brand and Balabala holding the top market share in children's wear for multiple years [2] - Casual wear business: The brand has undergone a comprehensive renewal, with the introduction of the "New Semir" concept, focusing on comfort, versatility, and national appeal, leading to an upgrade in brand image and product quality [2] - Children's wear business: Benefiting from rational consumption trends, the children's wear segment shows strong long-term growth potential, with Balabala expanding its overseas presence and entering Southeast Asian markets [2] - Online business: Steady growth in e-commerce, with the channel transitioning from inventory clearance to a primary sales channel, achieving higher gross margins and increasing revenue share [3] Financial Performance - Revenue for 2022A, 2023A, 2024E, 2025E, and 2026E is projected at 13,331 million yuan, 13,661 million yuan, 15,053 million yuan, 16,587 million yuan, and 18,296 million yuan, respectively, with growth rates of -13.5%, 2.5%, 10.2%, 10.2%, and 10.3% [1] - Net profit attributable to the parent company for the same periods is 637 million yuan, 1,122 million yuan, 1,264 million yuan, 1,491 million yuan, and 1,730 million yuan, with growth rates of -57.1%, 76.1%, 12.7%, 17.9%, and 16.0% [1] - EPS for 2024E, 2025E, and 2026E is forecasted at 0.47 yuan, 0.55 yuan, and 0.64 yuan, respectively [1] Business Overview - The company operates in both casual wear and children's wear, with Semir and Balabala as its flagship brands, targeting mass-market families and children aged 0-14, respectively [11] - The company also owns and operates multiple other brands, including MarColor, MiniBala, Heyjunior, Semirkids, and Aiken, covering various segments from infant wear to school uniforms and casual wear [12][13] - The company has a diversified brand portfolio, including licensed international brands such as Juicy Couture, Marc O'Polo, Asics Kids, and Puma Kids, enhancing its market presence and product offerings [15] Historical Development - The company was founded in 1996, initially focusing on casual wear, and later expanded into children's wear with the launch of Balabala in 2002 [19] - The company has gone through several phases of growth, including rapid expansion through franchising, inventory management during industry downturns, and supply chain reforms to improve responsiveness [20][21] - Post-pandemic, the company has focused on brand renewal and channel optimization, with both casual wear and children's wear segments showing recovery and growth [23] Profitability and Financial Health - The company's gross margin has steadily increased from 29.52% in 2008 to 46.1% in 2024H1, driven by improvements in product quality, functionality, and brand strength [28] - The children's wear segment has a significantly higher gross margin compared to casual wear, contributing to the overall profitability of the company [28] - The company maintains a low debt-to-asset ratio of 32.6% as of 2024H1, with strong cash reserves and a stable financial position, supporting future growth and investment [32] Industry Analysis - The adult casual wear market in China is substantial, with a market size of 16,730 billion yuan in 2023, showing a growth rate of 1.7% [48] - The competitive landscape in the casual wear industry is improving, with market share increasingly concentrated among leading brands such as Semir, UR, and Peacebird [49] - Semir's product positioning and pricing strategy are more aligned with mass-market consumers, with a focus on comfort and versatility, similar to Uniqlo, while other brands like ZARA and H&M target more fashion-forward segments [49][52] Strategic Initiatives - The company has implemented multiple equity incentive plans and employee stock ownership plans to motivate and retain key talent, demonstrating confidence in future growth [42][44] - The company has a high dividend payout policy, with an average payout ratio of 74% since its IPO, reflecting a strong commitment to shareholder returns [46]