News summary
CICC maintains Yihai International's "outperform industry" rating and raises its target price to HK$18. It is predicted that gross profit margin will increase steadily in 2024. Although net profit may fluctuate due to exchange rates, overall profitability is expected to increase.
Newsletter text
[CICC predicts that Yihai International's gross profit margin will be stable and rising in 2024]
CICC's latest research report maintains Yihai International's (01579)"outperforms the industry" rating and raises its target price to HK$18. The report pointed out that Yihai International actively adjusted its organizational structure to better respond to changes in consumer demand and promote product development and sales strategiesgameroomguysupdates.
Benefiting from the Lunar New Year stocking, Yihai International's third-party business performed strongly. Although growth slowed down from April to May despite a high base, the overall situation remained stable. CICC expects that third-party business will improve significantly this year as the results of organizational changes emerge.
In terms of related party business, the year-to-date turn-over rate has performed well, and CICC predicts that its annual revenue is expected to achieve good growth. In terms of profitability, CICC predicts that Yihai International's gross profit margin will be stable and rising in 2024, expense ratios will remain stable, and net profit growth after deducting non-recurring items may be slightly better than revenue growth, although exchange effects may lead to net Profits fluctuate, but the impact for the whole year is expected to be limited.