Citi released a research report stating that it gave Shenzhou International (02313) a “buy” rating, raised the earnings forecast per share from 2024 to 2025 by 3% to 4%, and raised the target price from HK$102 to HK$108.
According to the report, the operating income of the company's 2023 results was lower than generally predicted by the market, but at the same time, the company's attributable profit was in line with expectations, driven by gross margin exceeding expectations. The bank believes that the company can achieve double-digit sales growth within this year, mainly benefiting from last year's low base effect; in addition, with the exception of Nike, orders from all major global and domestic brands recorded double-digit growth.
Furthermore, Citi expects Shenzhou's revenue growth rate to be 12% this year, and indicates that the company has resumed positive growth since the fourth quarter of last year, and the relevant performance is expected to be maintained in the first quarter of this year. The bank expects the company's gross margin to rise further by 3.5% to 27.8% this year, and believes that the dividend ratio will remain above 60% in the future.