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]