Bosiden Releases Financial Report: Brand Potential Is Improved And Performance Is Growing In High Quality

On the evening of June 26, BOSIDENG (3998. HK) officially released its annual report for fiscal year 2023/24. According to the financial report, in the 23/24 fiscal year, the revenue of Bosiden Group increased steadily by 38.4% to about 23.21 billion yuan; The group's net profit increased by 44.7% steadily to about 3.12 billion yuan, and its operating profit again achieved high-quality improvement.

The performance exceeded expectations, and the net profit reached a new high for six consecutive years

In the past year, affected by the severe and complex macro situation at home and abroad and multiple unexpected factors, China's clothing industry has been under pressure at both ends of supply and demand. However, with the economic development going well in 2024, the demand of the clothing market has significantly warmed up. According to the data of the National Bureau of Statistics, from January to December 2023, the industrial added value of enterprises above designated size in the clothing industry decreased by 7.6% year on year; from January to March 2024, the industrial added value of textile enterprises above designated size increased by 4.9% year on year, and the operating revenue increased by 8.0% year on year.

In this context, Bosiden has focused on the four major sectors of "channel leadership, commodity leadership, image leadership and user leadership", and still achieved high-quality growth of both revenue and net profit.

In fact, this counter trend growth is not a flash in the pan. In 2018, Bosiden established the strategic direction of "focusing on the main channel, focusing on the main brand". Since then, Bosiden Group's revenue and net profit have hit a record high in the same period for six consecutive years. In the 23/24 fiscal year, the group's operating profit grew even faster than the income growth again, and the operating profit rate rose to 55.6%.

All business units achieved high-quality growth, and Bosiden brand grew 42.7% year on year

In terms of business segments, in the first half of the 23/24 fiscal year, Bosiden's major product categories achieved steady growth. In terms of Bosiden brand, its revenue steadily increased by 42.7% to about 16.78 billion yuan, a record high in the same period; Xuezhongfei brand launched online business, upgraded the Pratt Whitney brand, and continued to create explosive products, achieving revenue of about 2.02 billion yuan, up 65.3% year on year; In terms of OEM management, its revenue rose by 16.4% year-on-year to 2.67 billion yuan, a record high.

Five classic series are renewed and upgraded, and great country ingenious brands are reshaped

The financial report shows that the total revenue of down jacket of Bosiden brand is 19.52 billion yuan, up 43.8% year on year. Based on the strategic vision of "becoming the world's leading fashion functional clothing group" and adhering to the original intention of "China Bosiden, Warming the World", Bosiden Group focuses on its core business, concentrates its advantageous resources, focuses on its focus, specializes and excels, and constantly builds its core competitiveness in its main business.

In the course of decades, Bosiden has precipitated five classic series of climbing, extreme cold, puffing, high-end outdoor and skiing. In 2023, Bosiden's five classic series will be upgraded again, making a comprehensive breakthrough and reshaping from multiple dimensions such as warmth retention, fashion and portability, and once again setting a leading benchmark in the down jacket industry. On November 5, 2023, Bosiden China Wangfujing Yintai in88 Summit themed concept store opened in Beijing, China. With a more scene oriented presentation and immersive and interactive experience, Bosiden interprets the classic series of leading national brands to rebuild and upgrade.

With forward-looking brand insight and strong product innovation ability, Bosiden redefined "thin down jacket" once again. In September 2023, Bosiden staged a global fashion show in Milan Da Vinci Manor. With the design concept of "more variety, more fashion, more warmth", Bosiden redefined lightweight down jacket and set off a "wave of innovation" in the field of down jacket.

In addition, Bosiden launched a three piece goose down jacket, with the keyword of "breathing", to bring professional protection and comfort to the wearer through the blessing of scientific and technological protective fabrics; The three in one detachable design allows Bosiden down jacket to be connected with the shock jacket, further expanding the use scene, and giving full play to the brand advantages.

Successful expansion of incremental business in summer, opening up the imagination space for future performance growth

Bosiden expanded its product line again on the basis of stabilizing the first place in the down jacket market share.

From the perspective of semi annual income, Bosiden spans winter and has a promising future. In the first half of fiscal year 2023/24, thanks to the rapid increase in sales of sunscreen clothing, Bosiden brand realized a revenue of 4.42 billion yuan, up 25.5% year on year.

In June 2023, Bosiden launched the sunscreen clothing focusing on "black technology sunscreen" across the seasons, and made a direct debut with the topic of "thousand yuan sunscreen clothing". Compared with traditional sunscreen clothing, the SPF of hard core sunscreen series reaches 100+, and has functional protection function, more immersive outdoor activities.

It is understood that after the launch of the product, it has attracted wide attention, and has cooperated with many artists and designers to launch co branded products, which has received very positive feedback from consumers. Zhu Gaofeng, chief financial officer and vice president of Bosiden, said earlier when answering questions from reporters that during the 618 period in 2023, Bosiden's GMV on the JD Tmall platform will grow by more than 45%, and the growth rate of the dithering platform will be higher.

It is worth mentioning that on April 18, 2024, Bosiden appeared in the BJIFF2024 "Film and Fashion Unit" at the Beijing International Film Festival, and held the world's first sunscreen show at the Yanqi Lake at the foot of Beijing Yanshan, becoming a model of "using light and shadow to convey fashion" and leading the new trend of sunscreen fashion.

In addition, based on Posiden's active social responsibility and the implementation of the concept of sustainable development into the long-term development strategy of the enterprise, Morgan Stanley Capital International (MSCI) rated Posiden ESG as an industry leading "A", which represents the leading level of China's brand clothing industry. In addition, the Global Environmental Information Research Center (CDP) also gave Bosiden a "B" rating in the field of "climate change". The brand value of Bosiden has exceeded 100 billion yuan, and it has been continuously listed as "China's 500 Most Valuable Brands".

Continuous upgrading of supply chain management, continuous improvement of commodity operation and management capability

According to the financial report, as of March 31, 2024, the number of days of inventory turnover of Bosiden Group is 115, 29 days lower than 144 days on March 31, 2023; The turnover days of accounts receivable were 19 days, a decrease of 4 days compared with the same period last year, and the liquidity of Bosiden continued to increase.

This is due to Bosiden's continuous efforts in supply chain management. In the 2023/24 fiscal year, the Group's supply chain made systematic planning and upgrading in terms of flexible quick reaction, quality operation, scientific research technology, resource integration and cost management. In terms of commodity operation, Bosiden continued to maintain a low proportion of first orders, continued to use the adjustment mechanism of pull replenishment and quick return of small orders, and effectively promoted the integrated operation and management of omni channel commodities.

According to the research report of Dongxing Securities, the high-quality and rapid supply chain is an important competitive advantage in the clothing industry. Bosiden's quick reaction supply chain system is the core competitiveness of the company for efficient, healthy and sustainable development. The company supports faster turnover cycle and efficiency through pull replenishment, quick updating and quick reaction of small orders, and implements the supply chain system of "good selling without shortage and bad selling without production".

　 Upgrade channel structure, improve quality and efficiency of single store

By the end of March 2024, the total number of regular retail outlets of the down jacket business of Bosiden Group had decreased by 206 to 3217 compared with the end of the previous fiscal year.

Specifically, in terms of traditional offline channels, Bosiden continued to steadily improve the existing channel structure, layout, quality and terminal image. On the one hand, it promotes the business process reform of "taking stores as the center and customer value as the origin" to achieve "quality and efficiency improvement of single store operation"; On the other hand, through further consolidating the channel structure, layout, quality and terminal image, more refined management and operation channel construction, and through the implementation of projects such as "TOP stores", effective matching of channel end resources has been achieved.

On the online side, Bosiden actively laid out new retail business, focused on Tmall and JD sales platforms, synchronously laid out new social e-commerce businesses such as Tiaoyin, and continued to consolidate its online sales share and industry position. During the Double 11 this year, Bosiden ranked No. 1 in the sales list of Tmall platform brand clothing, No. 1 in Tmall official flag single store (men's clothing+women's clothing), No. 1 in JD and Vipshop clothing, and No. 1 in the full cycle brand women's clothing single store of Tiaoyin official flag.

This year, several well-known securities firms upgraded or maintained their ratings on Bosiden. On May 29, JPMorgan Chase raised the target price of Bosten to HK $6.4, maintaining its inclusion in the positive catalyst watch list; On June 13, Guosheng Securities maintained a buy rating on Bosiden, and believed that the core competitiveness of medium and long-term companies lies in: taking the initiative to think and respond to changes over the years, always adhering to product innovation and research and development, persisting in building brand core assets, persisting in the improvement and upgrading of the channel system, leading the trend as the industry leader, and continuously achieving high-quality growth at the level of financial indicators.

For 48 years, based on the brand positioning of "the world's leading down jacket expert", Bosiden has strengthened its core capabilities in product innovation, retail operation, brand communication, quality and quick reaction, providing a leading model worthy of reference for the high-quality development of China's functional apparel industry and even the entire apparel market. From "leading country" to "global leader", Bosiden is writing a new chapter of "world down jacket, China Bosiden, leading the new trend", and its future performance is expected.