Zhejiang Xinao Textiles (SH:603889) Orient Securities·2024-04-22 02:32Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 8.19 CNY based on a 13x PE valuation for 2024 [1][21]. Core Insights - The company reported a revenue of 4.44 billion CNY in 2023, representing a year-on-year growth of 12.4%, and a net profit of 404 million CNY, up 3.7% year-on-year. The company shows resilience in growth despite a decline in wool prices [30]. - The earnings per share (EPS) forecasts for 2024, 2025, and 2026 are projected at 0.63 CNY, 0.74 CNY, and 0.86 CNY respectively, reflecting adjustments from previous estimates [1][21]. - The company plans to distribute a dividend of 3 CNY per 10 shares, resulting in a dividend payout ratio of approximately 54% [30]. Financial Performance Summary - Revenue and Profit Growth: - 2023 revenue: 4.44 billion CNY, up 12.4% from 2022 - 2023 net profit: 404 million CNY, up 3.7% from 2022 - 2024 estimated revenue: 4.95 billion CNY, with a growth rate of 11.5% [31] - Gross Margin: - 2023 gross margin: 18.6%, a slight decrease of 0.2 percentage points from 2022 [30]. - Earnings Forecast: - EPS for 2024: 0.63 CNY, 2025: 0.74 CNY, 2026: 0.86 CNY [21][31]. Production Capacity and Strategic Initiatives - The company is advancing new production capacities, including: - A 50,000 spindle high-end worsted ecological yarn project in Vietnam, with phase one expected to be completed by the end of 2025 [30]. - A 60,000 spindle high-end worsted ecological yarn project, with 13,000 spindles already operational and further installations planned [30]. - The company is expanding into new product categories, including woven yarns and outdoor sports yarns, enhancing its competitive edge [30].