Core Viewpoint - The credit rating of Anhui Kairun Co., Ltd. remains at A+/Stable, supported by the expansion of its OEM manufacturing business and improved profitability, despite facing challenges from intense market competition in the luggage and apparel industry [1][5]. Company Overview - Anhui Kairun has diversified its OEM manufacturing business by incorporating Shanghai Jiale Co., Ltd., enhancing its product offerings and client base [1][7]. - The company has established relationships with well-known clients, contributing to a significant increase in profitability during the tracking period [1][9]. Financial Performance - Total assets increased from 35.16 billion in 2022 to 53.69 billion in 2025, while total liabilities rose from 17.49 billion to 27.01 billion during the same period [4][12]. - Operating revenue grew from 27.41 billion in 2022 to 42.40 billion in 2024, with a notable increase in net profit from 0.55 billion to 4.01 billion [4][12]. - The company's EBITDA increased significantly, reflecting improved operational efficiency and profitability [10][12]. Market Environment - The luggage and apparel industry is characterized by fierce competition, with a need for the company to optimize its debt structure and manage production capacity effectively [3][5]. - The global luggage market is projected to reach 170.2 billion by 2025, with China's market expected to grow at a rate of 5.9% [5][6]. Operational Insights - The company has expanded its production capacity, particularly in the apparel sector, but faces challenges in achieving optimal utilization rates [7][9]. - The acquisition of Shanghai Jiale has allowed the company to enter the textile and apparel manufacturing sector, diversifying its business model [7][10]. Risk Factors - The company must monitor the absorption of its new apparel production capacity and the impact of market competition on its operations [3][5]. - High short-term debt levels and the upcoming maturity of "Kairun Convertible Bonds" in 2025 necessitate a review of the company's debt management strategies [3][10].

Group 1: Company Performance - In 2024, the company achieved a main business revenue of 419,163.57 million RMB, a year-on-year increase of 36.54% [9] - The net profit attributable to shareholders reached 38,099.86 million RMB, up 229.52% year-on-year [9] - The net profit attributable to shareholders after deducting non-recurring gains and losses was 29,105.10 million RMB, reflecting a growth of 109.67% [9] Group 2: Market and Industry Outlook - The global luggage market is expected to reach 170.2 billion USD in 2025, growing by 6.1% [6] - The Chinese luggage market is projected to reach 232.7 billion RMB, with a year-on-year growth of 5.9% [6] - The global apparel market is anticipated to reach 1,509.9 billion USD in 2025, with a growth rate of 4.1% [6] Group 3: Strategic Initiatives - The company is focusing on high-quality customer strategies in its manufacturing segment, aiming to expand capacity and explore new production areas [7] - Plans to enhance digitalization, automation, and intelligent manufacturing capabilities are underway to improve operational efficiency [7] - The company aims to strengthen its brand through innovative product design and expanding sales channels [7] Group 4: Shareholder Engagement - The company is considering various methods to enhance investor relations and market recognition, including potential stock buybacks and roadshows for institutional investors [6][7] - There is an ongoing evaluation of shareholder welfare programs, such as customized gifts to enhance engagement and brand recognition [10][12]

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company's performance is expected to be strong, with significant contributions from the consolidation of Jia Le. In 2024, the company achieved revenue of 4.24 billion yuan (up 36.6% year-on-year) and a net profit attributable to shareholders of 0.381 billion yuan (up 229.5% year-on-year) [1][5] - The company's manufacturing segment saw revenue growth driven by acquisitions and improved production efficiency. In 2024, the manufacturing revenue reached 3.534 billion yuan (up 44.6% year-on-year), with notable growth in apparel manufacturing [2] - The brand management segment is actively expanding new channels, with a revenue of 0.658 billion yuan in 2024 (up 5.1% year-on-year). The collaboration with Xiaomi has deepened, launching multiple new products [3] Summary by Sections Performance Overview - In Q1 2025, the company reported revenue of 1.234 billion yuan (up 35.6% year-on-year) and a net profit of 0.085 billion yuan (up 20.1% year-on-year) [1] - The company’s net profit margin for 2024 was 9.0% (up 5.3 percentage points year-on-year) [4] Manufacturing Segment - The manufacturing revenue for 2024 was 3.534 billion yuan, with apparel manufacturing revenue growing by 146.4% year-on-year [2] - The gross margin for manufacturing in 2024 was 22.55%, with a decline attributed to the consolidation of Jia Le [2] Brand Management - The brand management revenue for 2024 was 0.658 billion yuan, with distribution revenue increasing by 20.8% year-on-year [3] - The gross margin for brand management was 25.52%, reflecting adjustments in product and channel structure [3] Financial Projections - Revenue projections for 2025-2027 are 5.344 billion yuan, 6.222 billion yuan, and 7.190 billion yuan, respectively, with year-on-year growth rates of 26%, 16%, and 16% [5][11] - The net profit attributable to shareholders is projected to be 0.384 billion yuan in 2025, with a growth rate of 0.7% [5][11]

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company's performance is expected to be strong, with significant contributions from the consolidation of Jia Le [5] - The garment manufacturing segment is experiencing revenue growth due to acquisitions and improved production efficiency [2] - The brand management segment is actively expanding new channels, with Xiaomi continuing to launch new products [3] - The company is effectively controlling expenses, with one-time investment gains from Jia Le enhancing profits [4] - Profitability is projected to improve as overseas production efficiency increases, with sustained revenue growth anticipated from 2025 to 2027 [5] Summary by Sections Financial Performance - In 2024, the company achieved revenue of 4.24 billion yuan (up 36.6% year-on-year) and a net profit of 0.381 billion yuan (up 229.5% year-on-year) [1] - For Q1 2025, revenue was 1.234 billion yuan (up 35.6% year-on-year) and net profit was 0.085 billion yuan (up 20.1% year-on-year) [1] Manufacturing Segment - In 2024, the garment manufacturing revenue reached 3.534 billion yuan (up 44.6% year-on-year), with bag manufacturing revenue at 2.372 billion yuan (up 20.3% year-on-year) and garment manufacturing revenue at 1.162 billion yuan (up 146.4% year-on-year) [2] - The gross margin for garment manufacturing was 22.55% (down 1.33 percentage points year-on-year), primarily due to the impact of Jia Le's consolidation [2] Brand Management - Brand management revenue in 2024 was 0.658 billion yuan (up 5.1% year-on-year), with distribution revenue at 0.498 billion yuan (up 20.8% year-on-year) and online revenue at 0.160 billion yuan (down 25.2% year-on-year) [3] - The gross margin for brand management was 25.52% (down 1.03 percentage points year-on-year) [3] Profitability and Forecast - The net profit margin for 2024 was 9.0% (up 5.3 percentage points year-on-year) [4] - Revenue forecasts for 2025 to 2027 are 5.344 billion yuan, 6.222 billion yuan, and 7.190 billion yuan, respectively, with year-on-year growth rates of 26%, 16%, and 16% [5] - Expected net profit for 2025 to 2027 is 0.384 billion yuan, 0.480 billion yuan, and 0.590 billion yuan, with growth rates of 1%, 25%, and 23% respectively [5]

Investment Rating - The report gives a "Buy" rating for the company [4]. Core Views - The company is positioned as a leading manufacturer in the bag industry, leveraging both B2B and B2C business models to drive growth. The B2B segment includes partnerships with renowned brands like Nike and Uniqlo, while the B2C segment focuses on its own brands, "90 Points" and "Xiaomi" [2][8]. - The company anticipates significant revenue growth, with projections of 32.04% in 2024 and 29.82% in 2025, alongside a substantial increase in net profit [8][12]. Financial Forecasts - Revenue (in million yuan): - 2023A: 3104.90 - 2024E: 4099.86 - 2025E: 5322.46 - 2026E: 6099.15 - Revenue Growth Rate (%): - 2023A: 13.28 - 2024E: 32.04 - 2025E: 29.82 - 2026E: 14.59 - Net Profit (in million yuan): - 2023A: 115.62 - 2024E: 390.46 - 2025E: 372.71 - 2026E: 452.66 - EPS (in yuan): - 2024E: 1.63 - 2025E: 1.55 - 2026E: 1.89 - PE Ratio: - 2024E: 13.96 - 2025E: 14.62 - 2026E: 12.04 [3][4][8]. Business Model and Strategy - The company operates under a dual business model, focusing on both B2B and B2C segments. The B2B segment includes OEM and ODM operations, while the B2C segment emphasizes direct sales through its own brands [12][48]. - The company has successfully diversified its operations, expanding from traditional IT bag manufacturing to include sports and leisure bags, as well as garment manufacturing [22][51]. Market Overview - The domestic bag market is experiencing a recovery, with a retail scale of 2349.2 billion yuan in 2023, reflecting a growth of 12.60% compared to 2022. The international market also shows signs of recovery, with a retail scale of 1551.5 billion USD [35][40]. - The report highlights the potential for domestic brands to capture market share, as the current market is dominated by foreign luxury brands [40][41]. Management and Governance - The company's ownership structure is stable, with the founder holding 51.23% of the shares, ensuring strong control and strategic direction [24]. - The management team is experienced, with backgrounds in leading IT companies, which enhances operational efficiency and competitive advantage [24]. Conclusion - The report indicates a positive outlook for the company, driven by robust growth in both B2B and B2C segments, strategic partnerships, and a favorable market environment [2][8][12].