CICC has released a research report maintaining its Outperform rating and a target price of HK$5.65 for BOSIDENG (03998). The target implies a potential 56% upside from the current share price, corresponding to 13 times FY27 price-to-earnings.
The firm highlights BOSIDENG's significant operational resilience as an industry leader. Consequently, CICC has raised its FY27 earnings per share forecast by 7.6% to RMB 0.37 and initiated an FY28 EPS forecast of RMB 0.39. At the current share price, the stock trades at 8.4 times FY27 and 8.1 times FY28 P/E, with an FY27 dividend yield of 9.6%.
Key Report Takeaways
FY26 Performance Exceeds Expectations
BOSIDENG reported FY26 results with revenue of RMB 273.5 billion, up 5.6% year-on-year, and net profit attributable to shareholders of RMB 39.9 billion, up 13.7% year-on-year, slightly surpassing expectations primarily due to better-than-expected revenue from the core brand. The company declared a final dividend of HK$0.25 per share, representing an 80% payout ratio.
Healthy Growth Continues for Core Brands
Both the BOSIDENG master brand and the Snow Flying brand sustained healthy growth trends in FY26. Down apparel business revenue grew by 8.7% year-on-year. Despite a volatile environment, the group's branded down apparel business demonstrated steady growth.
The BOSIDENG master brand recorded 6.9% growth, with the sales contribution from core IP series such as Extreme Cold and Puff continuing to increase, indicating ongoing product structure optimization. The brand enhanced its influence through initiatives like appearances at Paris Fashion Week, entering Galeries Lafayette in Paris, and setting up pop-up stores in Hong Kong's K11 mall.
The high-end urban AREAL series performed exceptionally well, successfully establishing consumer recognition. The Snow Flying brand continued to focus on the value-for-money down jacket market, driving online business and boosting brand influence through sponsorships like the Scottish Premiership, achieving a 16.6% year-on-year revenue increase.
Strong Performance Across Direct-to-Consumer Channels
In FY26, direct-to-consumer channel revenue for BOSIDENG's down apparel business grew 16.7% year-on-year, becoming a key growth driver. Both online and offline direct channels performed excellently.
Offline direct channels delivered strong same-store sales growth through the continuous development of distinctive, high-potential stores and refined management. Online channels benefited from BOSIDENG's outstanding brand and product strength, coupled with the exceptional operational capabilities of its Douyin (TikTok) team, leading to robust performance for the group's online business in FY26.
Healthy Inventory and Improving Profitability
The group's overall inventory remained at a healthy level in FY26, with inventory turnover days decreasing by one day to 117 days. Leveraging strong inventory management capabilities, the gross margin of the BOSIDENG master brand and the group's overall profit margin continued to improve. The company has demonstrated operational resilience in a fluctuating environment.
With the successful expansion of its product series and continuously growing brand influence, CICC believes the company is well-positioned for sustained healthy growth in FY27.
Potential Risks to Consider
Key risks include a retail environment falling short of expectations, weather-related uncertainties, and volatility in raw material prices.
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