NanJi E-Commerce(SZ:002127) HTSC·2025-05-20 11:05Investment Rating - The report initiates coverage on Nanji E-commerce with a "Buy" rating and a target price of 6.00 RMB, corresponding to a 26x PE for 2026 [1][9]. Core Views - The company is undergoing a significant brand transformation, shifting from an open authorization model to a self-sourcing and invitation-based franchise model, aiming to enhance product quality and restore brand image [1][2]. - The company is expected to achieve positive revenue growth in 2024, with a focus on expanding product SKUs and enhancing both online and offline sales channels [1][20]. - The report highlights the company's strategic pivot towards a "quality-price ratio" consumer demand, positioning itself as a provider of high-quality products at competitive prices [2][19]. Summary by Sections Company Overview - Nanji E-commerce, established in 1998, operates under national brand Nanji Ren and international brands such as Cardin Crocodile and Baijiahao, focusing on e-commerce and brand authorization services [1][25]. Brand Transformation - The company is implementing a dual-track operation model combining self-sourcing and franchise, enhancing product capabilities through collaboration with high-quality suppliers and luxury design teams [3][19]. - The introduction of a light luxury product line in September 2024 has significantly improved brand perception, with daily sales increasing from approximately 200,000 RMB to 20 million RMB by the end of December [2][20]. Supply Chain Reform - The company is reforming its supply chain by adopting a SPA model, which includes self-sourcing and a whitelist invitation system for franchises, thereby creating industry barriers [3][19]. - The focus on high-quality materials and advanced production techniques is expected to enhance product competitiveness and meet consumer demands [3][19]. Sales Channels - The company is leveraging both online platforms like Douyin and traditional e-commerce channels to drive sales, with Douyin's GMV showing a year-on-year increase of 103% in December 2024 [4][20]. - Offline, the company is testing self-operated retail through pop-up stores, with plans to open fixed stores in 2025, which could become a future growth driver [4][20]. Financial Projections - The report forecasts the company's net profit for 2025-2027 to be 331 million RMB, 575 million RMB, and 796 million RMB respectively, with a significant turnaround expected in 2025 [6][21]. - Revenue is projected to grow from 3.995 billion RMB in 2025 to 5.605 billion RMB in 2027, reflecting a compound annual growth rate of approximately 18.9% [6][21]. Market Positioning - The report contrasts its views with the market, asserting that despite previous challenges, the brand's strong recognition and strategic repositioning towards quality-price ratio will enable it to regain growth momentum [5][24]. - The company aims to continuously enrich its product offerings and expand its market presence, particularly in the homewear and bedding categories through its Baijiahao brand [20][23].