Tianfeng ** shares *** Sun Haiyang recently conducted research on Huali Group and released a research report "Deckers raised the annual guidance, the effect of destocking is significant, and orders are expected to grow synchronously", this report gives a ** rating to Huali Group, and the current stock price is 5848 yuan.
Huali Group (300979).
Deckers released FY24Q3 (2023 10 1-2023 12 31) financial report, revenue of 15US$0.6 billion, up 15% year-on-year (excluding currency effects); Net profit is about 3US$900 million, up 40 per cent year-on-year. At the same time, the full-year guidance was raised, and FY24 full-year revenue is expected to be about 41$500 million (previous guidance was $40..)300 million) increased by 14% year-on-year.
By brand, FY24Q3UGG revenue is 10$700 million, up 15% year-on-year, hoka4US$300 million, up 22% year-on-year, with a teva of 0$2.6 billion, down 16% year-on-year.
In terms of inventory, as of 23 12 31 the company's inventory is 5$400 million - 25% (230930 inventory 7.)300 million US dollars, 230630 is 7$400 million, 230331 5$300 million, 221231 of 7$200 million) Deckers is one of the main customers of Walley, which is an important foundry for its brands such as HOKA and UGG, and the improvement of Deckers inventory is obvious, we expect that related orders are expected to grow with the brand, and orders are expected to return to the upward channel. In order to meet the needs of customers, Huali will continue to strengthen its own development and design capabilities, rapid production and delivery capabilities and other competitive advantages.
Steady old and new, high stickiness of core customers.
In 2022, brands such as Nike, Hoka, Puma, UA, ON, and New Balance contributed significantly to the growth of operating income. In 2022, the company's largest customer accounted for 3852%, and the top five customers have a total sales of 187700 million yuan, accounting for 913% (83% in 2017), showing continuous growth in recent years, and the rest of the customers are brands such as Converse, Vans, UGG, and Hoka. The expansion of new customers was smooth, and the cooperation of brands such as Reebok, lululemon allbirds and other brands was smoothly implemented, bringing new revenue growth points.
The structure of order products is optimized, and there is more room for ASP improvement.
Huali's unit price in 2022 has increased by 7 in US dollars35%, the average unit price is about 14 US dollars, which is lower than the average unit price of peers, mainly in the product structure, a large proportion of the product structure of Converse and Vance is vulcanized shoes with a relatively low unit price. At present, the proportion of high-performance sports cold-adhesive shoes with high unit price of Nike, On, Reebok and Hoka has increased, which has increased the unit price of products.
On the basis of R&D process development, the company deepens cooperation with customers, promotes product structure optimization, and continues to develop products that meet consumer preferences and market trends.
Maintain Profitability and Maintain "Rating."
The inventory level of the company's core customers has declined, and orders are expected to gradually pick up, while continuing to stabilize the old and expand the new, optimize the order product structure, and increase the proportion of customer ** chain; In the future, the production capacity will continue to actively expand the factory, and the construction of new factories in Indonesia and Vietnam will be steadily promoted, and we expect the company's net profit attributable to the parent company in 23-25 years respectively. 300 million yuan, EPS was 27/3.2/3.7 yuan shares, the corresponding PE is 21 18 16X.
Risk warning: downstream demand is less than expected; Raw material and labor costs fluctuate and rise; Overseas epidemics have been repeated, and production capacity expansion is less than expected; exchange rate fluctuations and other risks.
*According to the calculation of the research report data released in the past three years, the research team of Tianfeng Sun Haiyang has conducted in-depth research on the stock, and the average accuracy of the past three years is as high as 9625%, and its **2023 attributable net profit is 317.2 billion, and the **PE converted according to the current price is 2151。
The latest profit** breakdown is as follows:
A total of 20 institutions have rated the stock in the last 90 days, with **18 ratings and 2 overweight ratings. The average institutional price target over the last 90 days is 688。
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