Macquarie released a research report sayingreelryobixenos3, awarded Shenzhou International (02313) a "Outperform" ratingreelryobixenos3Based on expected accelerated revenue growth, it raised its 2024 - 25 profit forecast by 2% each, and raised its target price from HK$89 to HK$91.
The company is expected to benefit from the replenishment demand of brand customers. Due to the low base in the same period last year, production capacity growth is expected to accelerate in the first half of this year. Therefore, employee recruitment in China and Vietnam is underway, and the number of employees in the group is expected to return to 9.9 by the end of the year.reelryobixenos3.90,000 people. The bank pointed out that Shenzhou's new customers such as lululemon and Polo currently account for approximately 5% of revenue contribution, coupled with the diversification of existing customer product categories, which also brings long-term growth opportunities.
The bank pointed out that the group's recovery is proceeding in stages and believes that the group is still at the stage of prioritizing capacity utilization. Once production capacity is limited under full utilization, it is expected to further improve the product mix. Although revenue growth is relatively more stable, this will have a negative impact on gross profit margin. In order to ensure the stability of the Chinese employee team after orders are resumed, the group will increase the salary of front-line employees in Ningbo by 10%-15%. The bank believes this reflects the group's optimism about future orders.
