Core Viewpoint - Shenzhou International is expected to experience a recovery in 2024, with a projected revenue increase of 14.8% compared to the previous year, despite facing challenges in 2023 [1] Group 1: Financial Performance - In 2024, the gross profit margin is anticipated to rebound to 28.1%, supported by effective cost control and a focus on leading downstream clients [1] - The company has demonstrated strong financial performance and cost management, which enhances profitability stability amid industry fluctuations [1] Group 2: Strategic Advantages - The company has established significant competitive barriers through vertical integration, covering the entire production chain from weaving to finished garments, resulting in a high fabric self-sufficiency rate and reduced delivery times [2] - Continuous technological innovation has allowed Shenzhou to maintain high gross profit margins, with high-tech products driving the overall gross margin recovery [2] - Deep partnerships with major clients such as Uniqlo, Nike, Adidas, and Puma have been cultivated, with these four clients contributing 80.75% of revenue in 2024, ensuring efficient capacity utilization [2] Group 3: Global Layout and Risk Mitigation - Shenzhou's production layout features a "China R&D + Southeast Asia manufacturing" model, reducing risks associated with international trade and leveraging lower labor costs in Southeast Asia [2] - By 2023, the proportion of production capacity in China decreased to 47%, while Vietnam's capacity increased to 27%, with a new base in Cambodia expected to add 10% capacity by 2025 [2] Group 4: Future Growth Drivers - The company is diversifying its client base, reducing reliance on major clients, with new customer revenue share expected to increase by 6.6 percentage points to 16.2% over three years [3] - The product structure is shifting towards high-value categories, with sports products sales increasing by 9.8% and leisure products by 27.1% in 2024, driven by innovative materials [3] - Digital supply chain improvements have enhanced operational efficiency by nearly 90%, with a focus on local sourcing strategies to shorten delivery times [3] Group 5: Earnings Forecast - Revenue projections for 2025, 2026, and 2027 are estimated at 31.227 billion, 34.131 billion, and 37.671 billion yuan respectively, with corresponding EPS of 4.45, 4.96, and 5.42 yuan [4]