China Merchants Securities released a research report indicating that Stella Holdings (01836), as a global leading manufacturer of sports leisure and fashion footwear, has shown steady orders in the past three years with strong production capacity, high labor efficiency, high-quality products and customer structure. Profitability has been promoted through automation to improve efficiency. Currently, the company has a high-quality product and customer structure, orderly expansion of production capacity, and a stable outlook for the industry. The company is expected to continue to improve profitability while maintaining stable order growth.
The bank stated that the company's orderly expansion of production capacity has gradually highlighted its advantages in product and customer matrix in the context of macroeconomic fluctuations. The revenue for the company is expected to be $1.59 billion, $1.68 billion, and $1.79 billion in the years 2024-2025, with a year-on-year growth rate of 6%, 6%, and 6%, respectively. Considering the continuous improvement of the company's order and efficiency, the net income is expected to be $0.16 billion, $0.18 billion, and $0.2 billion, with year-on-year growth rates of 13.5%, 12%, and 11%. The current market cap corresponds to 24PE8X and 25PE7X, and the first coverage gives a strong buy rating.
