Jinwu Financial News | According to Fangzheng Securities Research, Yuyuan Group (00551) announced the results for the first quarter of 2024. 24Q1 achieved revenue of US$2.0 billion, or -4.9% YoY, of which manufacturing revenue was -0.1% YoY; realized net profit to mother of US$100 million, +96.6% YoY, of which manufacturing business profit was +175.8% YoY.
According to the bank, the company's order visibility has improved markedly, and it is expected that the annual order volume will increase by medium to high number of units: Currently, as overseas sports brand inventories generally tend to be healthy, brand customer order visibility has improved markedly, and the order fulfillment rate is forecast to show a positive trend, and management maintains expectations of an increase in the number of medium to high units of orders throughout the year. Considering the previous high ASP base and current polarization of consumer trends, the bank believes that prices are under slight pressure.
The bank said that in 2024, the manufacturing business is expected to improve as overseas sports brand inventories improve, and there is strong certainty in order improvement throughout the year. Profits under positive operating leverage are expected to achieve highly elastic recovery growth; its Baosheng business is expected to gradually recover by benefiting from the improved performance of international brands in Greater China. In the medium to long term, as a leading sports brand manufacturer and dealer, the company is deeply bound to leading sports brands to establish high stickiness, and is expected to continue to benefit from the industry beta. The bank expects the company's net profit to be US$350 or 380 million in 24-25, +27% and +8%. The current stock price corresponds to a 24-year P/E of 9x, which has a certain margin of safety in the context of continuous improvement in sports manufacturing orders; if estimated according to the 23-year dividend rate, the current dividend rate is about 7%. The bank was covered for the first time, giving the company a “recommended” rating.