Jinwu Financial News | SPDB International Development Research Report said that based on strict control of fee rates, Baosheng International (03813) 4q23 operating margin increased sharply by 3.1 ppt to 4.8% year over year, better than market expectations. In 4Q23, the bank observed that (1) the company's inventory continued to decline and return to a healthy level, (2) the channel structure began to improve month-on-month, and (3) retail discounts improved year-on-year. If the above trend continues in 2024, it will ensure the recovery of the company's profit margin in 2024.
Based on the company's historical performance, the bank maintains a relatively conservative attitude and predicts that in 2024, the company's revenue will drop slightly by 1%, and the operating profit margin will expand by 50 bps year-on-year. Based on 6.0x2024p/E, the bank maintained a target price of HK$0.8 for Posheng. If Baosheng maintains a 30% dividend payout ratio in 2024, its dividend ratio will reach 6% in 2024. Maintain the company's “buy” rating.