Jinwu Financial News | According to BOC International Development Research Report, Taobo (06110)'s sales and net profit for the 2024 fiscal year increased 6.9%/20.4% year-on-year, 3% lower than the consistent forecast. Sales increased 6.5% year over year in the second half of fiscal year 2024 (7.3% in the first half), and net profit growth accelerated to 26.5% year over year (16.7% in the first half of the year). Taobo's dividend payout ratio reached 101%, averaging 107% over the past three years, and the dividend rate reached 7%.
According to the bank, the main brands maintained steady growth in the second half of the year, with a year-on-year increase of 6% (7% in the first half of the year), while other brands grew faster, with a year-on-year increase of 10.5%. Following the addition of Leng Shan, HOKA, and Kailushi, Taobo is now collaborating with the digital sports platform Fanatics and joining the high-end trail running brand Norda.
The bank maintained Taobo's target price of HK$7.2, based on 15.0 times the 2025-26 price-earnings ratio (previously 17 times the average price-earnings ratio for the 2024-25 fiscal year). Reiterating the buying rating, the bank continues to be optimistic because 1) Nike and Adidas are recovering in China; 2) high dividend rates; 3) Taobo is growing from a pure offline distributor in the past to a strong omni-channel sports ecosystem.