KORRUN(SZ:300577) HUAXI Securities·2024-06-06 13:02Investment Rating - The investment rating for the company is "Buy" with a target price set to outperform the market index by 15% [5][32]. Core Insights - The company plans to acquire a total of 15.9% equity in Shanghai Jiale, which will enhance its performance through consolidation and expansion into the garment manufacturing sector, providing a larger market opportunity [3][16]. - The acquisition will increase the company's direct ownership in Shanghai Jiale from 35.94% to 51.85% [3]. - The total valuation for Shanghai Jiale is estimated at 1.26 billion [3]. - The company will utilize 160 million from convertible bonds and 40 million from its own funds to finance the acquisition [3]. Financial Summary - Revenue projections for 2024 are estimated at 4,639 million, with a year-on-year growth of 49.4% [10]. - The net profit for 2024 is projected to be 314 million, reflecting a significant increase of 171.5% year-on-year [10]. - The gross margin is expected to stabilize around 24.3% in 2024 [10]. - Earnings per share (EPS) are forecasted to be 1.31 in 2024, increasing to 2.36 by 2026 [10][17]. - The company anticipates revenue contributions from the acquisition to be 80 million in 2024 and 200 million in 2025 [16]. Growth Potential - The company is expected to achieve high double-digit growth in its B2B business due to its strategic positioning in Indonesia and recovery in profit margins [17]. - The B2C segment is projected to grow at a rate of 30% in 2024 [17]. - The acquisition of Shanghai Jiale is expected to bolster the company's performance and expand its garment manufacturing capabilities [17].