Zhejiang Natural Outdoor Goods (SH:605080) Orient Securities·2024-04-02 16:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 20.4 CNY based on a 17x PE valuation for 2024 [3][8]. Core Insights - The company reported a revenue of 823 million CNY in 2023, a decline of 13% year-on-year, and a net profit attributable to shareholders of 131 million CNY, down 38.6% year-on-year. However, in Q4 2023, revenue grew by 6.7% year-on-year, marking the first increase after five consecutive quarters of decline [2][3]. - The main business faced pressure due to inventory destocking in Europe and the US, while the Cambodian insulated hard case business began to ramp up. Revenue from inflatable mattresses fell by 25%, while outdoor bags saw a 23% increase in revenue, primarily due to the bulk shipment of insulated hard cases from Cambodia [2]. - The gross margin decreased by 2.8 percentage points to 33.8% in 2023, with the outdoor bag segment being the main drag. The company anticipates that inventory destocking pressures in Europe and the US will gradually ease starting in 2024, with growth opportunities identified in enhancing market share with existing clients and expanding into new product categories [2][3]. Financial Summary - The company’s financial performance for 2023 shows a significant drop in operating profit to 148 million CNY, down 38.4% year-on-year. The projected earnings per share for 2024, 2025, and 2026 are 1.20 CNY, 1.39 CNY, and 1.61 CNY respectively [5][8]. - The revenue forecast for 2024 is set at 957 million CNY, reflecting a 16.2% growth, followed by 1.08 billion CNY in 2025 and 1.22 billion CNY in 2026 [5][8].