Orient Securities released a research report stating that it maintains a 'buy' rating for Bosideng (03998). Based on the FY24 financial report, it adjusted the profit forecast for the next three years (increasing the revenue and sales expense ratio, decreasing the gross margin), and predicts that the EPS for FY24-26 will be 0.28, 0.33, and 0.38 yuan respectively (originally 0.27, 0.31, and 0.36 yuan), with a target price of HKD 6.03.
The report states that the company's gross margin in FY24 increased by 0.1 percentage points to 59.6% year-on-year. Among them, the gross margin of branded down jackets fell by 1.2 percentage points to 65%, and we determined that it was mainly due to adjustments in the channel and product structure ratios. The sales and management expense ratio of the company in FY24 decreased by 1.8 and 0.7 percentage points year-on-year, reflecting the company's excellent cost control ability and the improvement of operating leverage efficiency. The net margin of the company's attributable shareholders in FY24 increased by 0.5 percentage points year-on-year to 13.2%.
Looking ahead, the bank believes that functional products such as sun protection clothing and outdoor jackets are expected to become new growth points for the company. The expansion of the company's new product categories fits well with the current fashion trend of outfits, while gradually smoothing out the differences in off-peak and peak seasons, and striving for better channel resources. The bank is optimistic about the broad space brought by Bosideng's strengthening of the core category of down jackets and the innovative development of fashionable and functional new product categories.