Investment Rating - The report maintains a rating of "Buy" for Tianhong International Group (2678.HK) with a target price of 4.28 HKD [2]. Core Views - The company faced performance pressure in 2023 due to weak demand, with a revenue decline of 5% year-on-year and a net loss of 376 million RMB [2][4]. - The company expects gradual improvement in profitability in 2024, driven by restructuring efforts and enhanced operational efficiency [4][5]. - The forecast for 2024 includes sales targets of 760,000 tons of yarn, 92 million meters of woven fabric, and 12,000 tons of knitted fabric, with expected growth rates of +2.6%, +2.6%, and -22.1% respectively [4]. Summary by Sections Financial Performance - In 2023, the company reported a total revenue of 22.725 billion RMB, down 4.5% from the previous year, and a net profit loss of 376 million RMB, marking a significant decline from a profit of 157 million RMB in 2022 [5][6]. - The gross profit margin decreased by 5.1 percentage points to 6.4% in 2023, primarily due to weak overseas market demand and price declines [4][7]. - The company’s inventory value decreased by 30.9% year-on-year to 5.245 billion RMB, with inventory turnover days reduced by 17 days to 109 days [3]. Operational Strategy - The company undertook a series of restructuring initiatives in 2023, including divesting low-profit assets and enhancing the integration of its vertical supply chain [4]. - Plans for 2024 include upgrading existing production capacity and increasing the development of green and environmentally friendly products [4]. Future Projections - The report projects a gradual recovery in profitability, with expected EPS of 0.83, 1.18, and 1.60 RMB for 2024, 2025, and 2026 respectively [4][5]. - The company’s P/E ratios for 2024 and 2025 are forecasted to be 5 and 3 times, respectively [4].
2023年业绩点评：23年需求疲弱下业绩承压，24年期待盈利能力逐步改善