Zhitong Financial APP learned that Guoxin Securities released a research report saying that it maintained Virgin's (02199) "buy" rating. Due to the negative impact of poor overseas demand on orders, it lowered its profit forecast. It is estimated that the net profit of FY2023-FY2025 is 4.0x5.5 / 660 million Hong Kong dollars respectively (the original FY2023/2024 is 7.6 / 970 million Hong Kong dollars respectively), an increase of 4% over the same period last year. Lower the reasonable valuation to HK $3.80-4.00 (originally HK $4.80-HK $5.20), corresponding to FY2025PE8.5-9.0x. At present, the low point of orders has passed, FY2024 fiscal year will begin to improve month-on-month, medium-and long-term optimistic about lingerie leader profit growth elasticity.
The bank believes that FY2024 expects revenue to rise by a high number of units in the first half of the year compared with the previous year, and medium-and long-term gross profit margins will continue to rise. 1) FY2024 guidelines: FY23Q4 is the trough of the business, and management expects FY241H revenue to grow by a high number of units compared with FY232H, in which lingerie growth is low, sports products are flat, and the share of the Chinese market will increase from 9% to 18%. FY242H revenue is expected to achieve better growth both month-on-month and year-on-year. 2) medium-and long-term points: first, the promotion of product process optimization and automation system will help to improve human efficiency, product innovation will lead to unit price increase, Vietnam factory capacity utilization rate climbing will reduce depreciation share, drive profit margin to continue to improve. Second, after the establishment of the joint venture with Victoria's Secret China, in terms of marketing, innovation and new retail, on the one hand, the increased development of popular styles in the Chinese market feeds the American market, and the company's cooperation with customers deepens; on the other hand, Victoria's Secret China sales are bright. FY23's annual operating income in the Group is HK $1.34 billion. The joint venture company begins to contribute profits from FY232H and will continue to contribute performance in the future.