Investment Rating - Buy rating maintained for China Lilang (01234 HK) with a target price range of HKD 5 20-5 50 [1][12] Core Views - China Lilang achieved 15% revenue growth and 18% net profit growth in 2023, with a slight increase in net profit margin [1] - The company's main series/light business revenue grew by 11%/35% respectively in 2023 [1] - Gross margin increased by 2 2 percentage points to 48 2% due to inventory provision reversal and no distributor rebates [1] - Operating cash flow surged 68% to RMB 1 10 billion in 2023, with a net cash ratio of 2 1 [1] - Dividend payout ratio remained high at 74%, consistently above 70% over the past 5 years [1] - H2 2023 saw accelerated growth with revenue up 21 6% and net profit up 36 1% [1] Channel Transformation and Product Competitiveness - Channel reform: Light business transitioned to self-operated and main series to consignment, improving inventory management and operational efficiency [1] - Light business achieved profitability with 35% revenue growth and 17% net store openings in 2023 [1] - Product competitiveness: 75% original design ratio, with upgraded water-repellent down jacket 2 0 driving 30% growth in down jacket sales [1] 2024 Operating Targets - Total retail sales growth target of 15% for 2024 [2] - Plan to open 100-200 new offline stores and achieve 20% growth in new retail business [2] Financial Projections - Revenue forecast: RMB 4 035/4 542/5 002 million for 2024E/2025E/2026E, representing 13 9%/12 6%/10 1% growth [3][13] - Net profit forecast: RMB 594/676/754 million for 2024E/2025E/2026E, representing 12 0%/13 7%/11 6% growth [3][13] - Net margin expected to remain stable at around 15% [3][13] - ROE projected to increase from 13 4% in 2023 to 16 6% in 2026 [3][13] Valuation Metrics - 2024E PE: 9 5-10x [12] - 2024E PB: 1 11x [3] - 2024E EV/EBITDA: 9 2x [3]
2023年净利润增长18%，经营稳健高分红