Investment Rating - The investment rating for the company is "Outperform the Market" [5][3][33] Core Views - The company has experienced a 33% revenue growth in the first half of the year, with a steady improvement in profitability. The main business includes bag and clothing OEM and brand operations, benefiting from stable growth and the consolidation of Jia Le [1][3] - The company is expected to continue expanding its production capacity in Indonesia, which will contribute to rapid growth in OEM business scale. There is significant potential for profit margin improvement as Jia Le's current profitability is below that of its peers [3][25] - The brand business is projected to maintain steady growth, although its revenue contribution is gradually decreasing [25] Summary by Sections Financial Performance - In the first half of the year, revenue increased by 32.5% to 2.43 billion yuan, while net profit attributable to shareholders decreased by 24.8% to 190 million yuan, primarily due to a one-time investment gain from the acquisition of Jia Le last year [1][2] - The gross margin improved by 0.7 percentage points to 24.7%, driven by optimization in product and customer structure [1][2] - The second quarter saw a revenue growth of 29.5% to 1.19 billion yuan, with operating profit increasing by 25% to 100 million yuan after excluding the one-time gain from last year [1][2] Business Segments - The OEM business for bags grew by 13% to 1.42 billion yuan, while clothing OEM revenue surged by 148% to 680 million yuan due to Jia Le's contribution [2][25] - Brand business revenue increased by 8.9% to 310 million yuan, primarily driven by the Xiaomi brand, although its gross margin decreased by 1.1 percentage points to 24.1% [2][25] Profit Forecast and Valuation - The company maintains its profit forecast, expecting net profits of 360 million, 390 million, and 420 million yuan for 2025-2027, with year-on-year growth rates of 24.9%, 10.2%, and 7.8% respectively, after excluding the one-time gain in 2024 [3][29] - The target price is set between 22.8 and 23.8 yuan, corresponding to a PE ratio of 15-16x for 2025 [3][29]

Investment Rating - The investment rating for the company is "Buy" [5] Core Views - The company demonstrated strong growth in operating net profit, with a 23% increase in H1 2025, despite a decline in net profit due to one-time investment income from the fair value reassessment of Shanghai Jiale [1][4] - The company's revenue reached 2.427 billion yuan in H1 2025, a year-on-year increase of 32.5%, while the net profit attributable to the parent company was 187 million yuan, down 24.8% year-on-year [1] - The company is expected to achieve double-digit growth in OEM revenue, driven by its production capacity advantages in Indonesia and an expanding client base [4] Summary by Sections OEM Manufacturing - In H1 2025, OEM manufacturing revenue was 2.098 billion yuan, up 37.2% year-on-year, with bag manufacturing revenue at 1.419 billion yuan (up 13.0%) and apparel manufacturing revenue at 679 million yuan (up 148.3%) [2] - The gross margin for OEM manufacturing was 24.67%, an increase of 0.96 percentage points year-on-year, with apparel gross margin significantly improving due to enhanced management and integration [2] Brand Operations - Brand operations revenue was 306 million yuan in H1 2025, an increase of 8.9% year-on-year, with distribution revenue at 251 million yuan (up 28.3%) and online revenue at 55 million yuan (down 35.4%) [3] - The gross margin for brand operations was 24.14%, a decrease of 1.10 percentage points year-on-year, but is expected to recover as new products are launched and channels are optimized [3] Financial Forecast and Investment Recommendations - The company is projected to achieve revenues of 5.164 billion yuan, 5.916 billion yuan, and 6.776 billion yuan for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 21.8%, 14.6%, and 14.5% [4] - The net profit attributable to the parent company is expected to be 372.4 million yuan, 459.2 million yuan, and 558.8 million yuan for the same years, with growth rates of -2.3%, 23.3%, and 21.7% respectively [4]

Investment Rating - The report maintains an "Outperform" rating for the company [2] Core Insights - The company achieved record high revenue and net profit in 2024, with revenue reaching 4.24 billion yuan (up 36.6% year-on-year) and net profit of 381 million yuan (up 229.5% year-on-year) [7][19] - The company continues to see strong growth in its OEM business, particularly in the apparel sector, with a significant contribution from the newly consolidated Shanghai Jiale [7] - The strategic value of the company's production capacity in Indonesia is highlighted, with over 70% of its production capacity now located overseas, benefiting from labor cost advantages and tariff avoidance for exports to the U.S. [7] Financial Data and Profit Forecast - Total revenue is projected to reach 5.31 billion yuan in 2025, with a year-on-year growth rate of 25.2% [5] - The net profit for 2025 is estimated at 381 million yuan, with a slight increase in subsequent years to 460 million yuan in 2026 and 559 million yuan in 2027 [5] - The company plans to distribute a total dividend of 0.337 yuan per share for 2024, representing a payout ratio of 21% [7] Business Segments Performance - The OEM manufacturing segment reported revenue of 3.53 billion yuan in 2024, a 44.6% increase, while the brand management segment saw revenue of 660 million yuan, a 5.1% increase [7] - The gross margin for the OEM business was 22.55%, with the apparel segment showing significant growth but lower margins due to production efficiency ramp-up in Indonesia [7] Valuation and Market Position - The report suggests a target market capitalization of 5.9 billion yuan for 2025, indicating a potential upside of 19% from the current market value [7] - The company is valued at a price-to-earnings (PE) ratio of 13 for 2025, which is in line with the average PE of comparable manufacturing companies [15]

Investment Rating - The investment rating for the company is "Outperform the Market" [3][36][41] Core Views - The company is expected to achieve a revenue growth of 37% in 2024, driven by the acquisition of Shanghai Jiale, which will contribute both one-time gains and ongoing performance post-consolidation [1][36] - The main business segments include bag and clothing OEM, with the OEM business accounting for 83% of total revenue in 2024 [1] - The company reported a significant increase in net profit, with a year-on-year growth of 229.5% to 381 million yuan in 2024, aided by the consolidation of Jiale [1][36] - The overall gross margin is expected to decline slightly due to the lower margin of Jiale, with a year-on-year decrease of 1.5 percentage points to 22.9% [1][36] - The company anticipates continued high growth in Q1 2025, with revenue of 1.234 billion yuan, a 35.6% increase year-on-year, and a net profit of 85 million yuan, up 20.1% [2][36] Summary by Sections Financial Performance - In 2024, the company achieved operating revenue of 4.24 billion yuan, a 36.6% increase year-on-year, and a net profit of 381 million yuan [1][38] - The first quarter of 2025 saw revenue of 1.234 billion yuan, reflecting a 35.6% growth, with net profit reaching 85 million yuan [2][38] - The gross margin for Q1 2025 improved slightly to 24.7%, despite the impact of Jiale's lower margin [2][38] Business Segments - Bag OEM revenue for 2024 is projected to grow by 20.3% to 2.372 billion yuan, benefiting from client replenishment and increased orders from major clients like Nike and Decathlon [2][36] - Clothing OEM revenue is expected to surge by 146.43% to 1.162 billion yuan, primarily due to the consolidation of Jiale [2][36] - Brand business revenue grew by 5.1% to 658 million yuan, driven by collaboration with Xiaomi [2][36] Future Outlook - The company is optimistic about expanding its OEM business in Indonesia, with production capacity expected to ramp up in the next two years [36] - Profitability is anticipated to improve as Jiale's margins align with industry peers, with significant potential for margin expansion [36] - The target price is set between 22.8 and 23.8 yuan, corresponding to a PE ratio of 15-16x for 2025 [36][38]