Investment Rating - The report maintains a "Buy" rating for key companies in the textile and apparel sector, including Anta Sports, Xtep International, and Li Ning, among others [12]. Core Insights - The report highlights the rapid expansion of the high-performance outdoor apparel market in China, with a projected market size growth from 53.9 billion yuan in 2019 to 102.7 billion yuan in 2024, representing a CAGR of 13.8% [22][25]. - The company Pelliot, established in 2012, has shown significant revenue growth, achieving 1.77 billion yuan in 2024, a 94% increase year-on-year, with a net profit of 280 million yuan, reflecting an 86% increase [1][17]. - The competitive landscape of the high-performance outdoor apparel market is relatively fragmented, with the top 10 brands holding a combined market share of 27.2% in 2024, and Pelliot being the fastest-growing brand with a retail CAGR of 127.4% from 2022 to 2024 [2][29]. Summary by Sections Company Overview - Pelliot focuses on high-performance outdoor apparel and equipment, offering a wide range of products suitable for various outdoor activities and urban commuting [1][17]. - The brand's revenue from the Pelliot brand accounted for 98% of total revenue in 2024, with the Excelsior brand contributing 33 million yuan [1][17]. Industry Overview - The high-performance outdoor apparel market in mainland China is expected to grow from 539 billion yuan in 2019 to 1,027 billion yuan in 2024, with a forecasted CAGR of 16% from 2024 to 2029 [2][22]. - The apparel segment is the largest within the high-performance outdoor apparel market, projected to reach 712 billion yuan in 2024, accounting for 69% of the total market [25]. Operational Highlights - Pelliot employs a Direct-to-Consumer (DTC) sales model, focusing on enhancing product quality and brand image through targeted marketing strategies [3][4]. - The company has invested significantly in R&D, with expenditures increasing from 13.6 million yuan in 2022 to 31.5 million yuan in 2024, representing a commitment to product innovation [3][30]. Financial Data Analysis - Pelliot's revenue and profit have shown rapid growth, with a projected revenue of 1.77 billion yuan and a net profit of 280 million yuan in 2024, indicating strong financial performance [1][21]. - The report emphasizes the importance of maintaining a healthy inventory turnover ratio, with the overall inventory situation being stable across the sector [5]. Market Trends - The report notes a healthy growth trajectory for the outdoor apparel sector, driven by increasing consumer participation in outdoor activities and a rising demand for multifunctional high-performance apparel [27][28]. - The report recommends focusing on brands with strong fundamentals and growth potential, particularly in the sportswear segment, which is expected to outperform the broader apparel market [5].

Core Viewpoint - The outdoor brand "Pelliot" (full name: Pelliot Outdoor Sports Group Co., Ltd.) has submitted its prospectus to the Hong Kong Stock Exchange, officially starting its IPO process, following explosive growth from 2022 to 2024, with net sales increasing from 351 million to 1.733 billion yuan, marking a compound annual growth rate of 122.2% [1][2]. Group 1: Company Background and Growth - Founded in 2012 by a couple, Liu Zhen and Hua Jingling, Pelliot initially focused on affordable outdoor apparel, primarily through online sales, and saw modest performance until the "outdoor boom" during the pandemic in 2022 [3][4]. - The launch of the "Classic Series" three-in-one jacket in 2022, priced at 499 yuan, filled a market gap between high-end international brands and low-cost products, leading to significant revenue growth [3][4]. - Revenue figures for 2022 to 2024 are projected at 379 million, 908 million, and 1.766 billion yuan, respectively, with a compound annual growth rate of 115.86% [3]. Group 2: Ownership and Governance Structure - Liu Zhen and Hua Jingling collectively hold 63.17% of the company, granting them absolute control [4]. - The "couple-run" governance structure can lead to efficient decision-making but poses risks such as potential "one-man rule" and conflicts arising from personal disagreements [4]. Group 3: Financial Performance and Profitability - Pelliot's gross margin is reported to be 59.6% in 2024, higher than competitors like Arc'teryx (55.4%) and Sanfo Outdoor (56.67%) [5]. - The main revenue source is apparel, accounting for over 90% of total income in 2024, with an average selling price of approximately 732 yuan per item [5]. Group 4: Quality Control Issues - Despite high gross margins, consumer feedback indicates quality control issues, with complaints about inconsistent product quality and inadequate waterproofing [6][8]. - The company has faced criticism for not providing quality inspection reports, raising concerns about transparency [14][15]. Group 5: Marketing and Sales Strategy - Pelliot has effectively utilized social media and influencer marketing to drive sales, with online direct-to-consumer (DTC) revenue reaching 1.351 billion yuan in 2024, accounting for 76.5% of total revenue [18]. - However, the company has incurred high sales and distribution costs, with advertising expenses totaling 598 million yuan over the past three years [18]. Group 6: Research and Development Concerns - Pelliot's R&D expenses have been significantly lower than sales expenses, with a decreasing trend in R&D investment over the past three years [19]. - The company holds only 54 patents, with a limited number of high-value invention patents, indicating a lack of innovation [19]. Group 7: Market Challenges - Pelliot faces challenges from increased competition as international brands localize and domestic brands enhance their marketing strategies [20]. - The company has experienced rising inventory levels, with finished goods inventory increasing by 180% from 2023 to 2024, indicating potential overstock issues [20]. Group 8: Brand Image and Controversies - A controversy arose regarding the brand name "Pelliot," which some linked to a historical figure associated with looting cultural artifacts, leading to public backlash [21][23]. - The company has struggled with high-end product positioning, with new product lines facing challenges in market acceptance and sales performance [24].