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赢家时尚：Boosting sales is the number one priority
03709EEKA FASHION(03709) 西牛证券·2025-02-03 10:30

Investment Rating - The investment rating for EEKA Fashion is "BUY" with a target price of HK11.88[6].CoreInsights−Thecompanyisexpectedtoexperiencealessthan5 11.88 [6]. Core Insights - The company is expected to experience a less than 5% year-over-year decrease in revenue and a decline of less than 45% in net profit for the year ending December 2024, indicating stronger headwinds than previously estimated [1]. - The retail environment in the second half of 2024 is projected to remain stagnant, with garment sales in China experiencing a slight decline due to a high base effect from 2023 and disappointing sales attributed to unseasonably warm weather [2]. - Despite short-term setbacks, the company is committed to its "affordable luxury" positioning and will continue to invest in marketing, which has contributed to the decline in net profit [3]. - The company has made progress in inventory management, and stock clearance is not expected to be a significant issue in FY 2025, with a focus on boosting sales as the top priority [5]. Financial Performance Summary - For the year 2024, EEKA Fashion's revenue is projected to be RMB 6,606.9 million, down from RMB 6,912.3 million in 2023, reflecting a year-over-year decline of 4.4% [14]. - The net profit for 2024 is estimated at RMB 485.2 million, a significant decrease of 41.7% compared to RMB 832.6 million in 2023 [14]. - The gross margin is expected to remain stable at around 75.9% for the upcoming years, indicating a historically high level [14]. - The company plans to maintain marketing expenses at 3% - 4% of total revenue, despite the need for slight adjustments to contain costs [3]. Market Context - The market capitalization of EEKA Fashion is approximately HK 6.1 billion, with a current price of HK8.61,reflectingasignificantdropfromits52−weekhighofHK 8.61, reflecting a significant drop from its 52-week high of HK 14.04 [6]. - The company’s performance relative to the Hang Seng Index has been poor, with a 1-year relative performance of -62.3% [6]. - The retail sales of department stores in China have declined by 2.4% year-over-year, impacting key sales channels for the company's primary brand, Koradior, which accounts for over one-third of total sales [2].