Investment Rating - Buy (Maintained) with a current price of HKD 72.7 [2] Core Views - Despite a 10.1% YoY decline in revenue in 2023, the company's net profit remained stable, with a slight decrease of 0.1% YoY to RMB 4.557 billion [5] - The company's gross margin improved by 2.2 percentage points to 24.3% in 2023, driven by increased efficiency in overseas factories and reduced fixed costs per unit [6] - The company's net cash assets after deducting borrowings reached RMB 11.438 billion at the end of 2023, indicating strong financial health and risk resistance [8] - The company expects order improvements and profitability recovery in 2024, with capacity utilization returning to full production levels in Q1 2024 [9] Revenue and Profit Analysis - Revenue in 2023 was RMB 24.97 billion, down 10.1% YoY, primarily due to reduced demand in European and American markets and customer inventory adjustments [5] - Net profit attributable to shareholders was RMB 4.557 billion, down 0.1% YoY, with a net profit margin of 18.3%, up 1.8 percentage points YoY [5] - EPS for 2023 was RMB 3.03, with a full-year dividend payout ratio of 60.3% [5] - Revenue from sportswear and casual wear declined by 13.6% and 1.4% YoY, respectively, while revenue from underwear increased by 30.2% YoY [5] Geographic and Customer Breakdown - Domestic sales accounted for 28.5% of total revenue, growing 0.7% YoY, while sales in Europe and the US declined by 19.1% and 20.4% YoY, respectively [6] - The top four customers (adidas, Nike, Uniqlo, and Puma) accounted for 79.6% of total revenue, down 2.4 percentage points YoY, with their combined revenue declining by 12.8% YoY [6] Operational Efficiency and Financial Health - The company's overseas factories contributed 53% of total garment output in 2023, up 7 percentage points YoY, with Cambodia accounting for 26% of total output [8] - Inventory turnover days increased by 11 days to 120 days, while accounts receivable turnover days increased by 17 days to 73 days [7] - Operating cash flow increased by 12.9% YoY to RMB 5.227 billion in 2023 [7] Future Outlook - The company plans to expand its workforce in 2024, adding approximately 2,000 workers in Ningbo and Vietnam, and exploring new regional layouts beyond Vietnam and Cambodia [9] - Revenue and net profit are expected to grow in 2024, with projected EPS of RMB 3.71, 4.29, and 4.90 for 2024, 2025, and 2026, respectively [9] - The company's PE ratio is forecasted at 18x for 2024 and 15x for 2025, maintaining a "Buy" rating [9]
2023年业绩点评：23年收入下滑背景下利润平稳，24年期待订单好转和盈利能力修复