Jinwu Financial News | GF SEC research indicates that CRYSTAL INTL (02232) is a global clothing giant, operating in five core categories, and has nearly fifty years of experience in the Industry. According to the company's prospectus and Earnings Reports, it was established in 1970 and focuses on five core categories: leisure wear, sports and outdoor clothing, denim, underwear, and sweaters, all of which occupy leading market positions.
The report pointed out that the company's moat is wide: (1) The company's customer resources are high quality and deeply integrated, as major clients have strong growth potential, and their inventory-sales ratio has returned to a healthy state, coupled with the trend of supplier concentration which aids company growth. (2) Layout of manufacturing capacities in multiple overseas countries, enjoying multiple favorable conditions. (3) The company's design and research capabilities are outstanding, closely collaborating with clients through co-creation models to jointly design and develop products with high technological barriers, establishing exclusive partnerships that enhance cooperative stickiness and product added value. (4) Operating in multiple categories has led to significant success in cross-selling.
The report continued to indicate that looking ahead: (1) Continuous promotion of vertical integration of the Industry Chain + automation technological reforms is expected to enhance profit levels. According to the company's Earnings Reports and official website, after acquiring two fabric factories in Vietnam and Bangladesh in 2021-2022, the company continues to advance vertical integration; it is also promoting comprehensive technological reforms, aiming to establish the first modernized center in Vietnam in 2024 for advanced equipment development. (2) In recent years, the company's revenue share from the USA has declined, which is expected to further reduce the risk of trade friction.
The report stated that the company is expected to have EPS of 0.07/0.08/0.09 USD per share for 2024-2026. Based on comparable company valuations, it is assigned a 9 times PE for 2025, corresponding to a reasonable value of 0.74 USD per share, which converts to 5.77 HKD at the Exchange Rates of 2024.12.15 (1 USD = 7.78 HKD), with an initial coverage giving a 'Buy' rating.
