JNBY Design Limited (¡§JNBY¡¨), a leading designer-brand fashion group in China, demonstrated robust performance in the fiscal year ended June 30, 2024 (FY2024). Leveraging its diversified brand portfolio, solid business model, and operational excellence, JNBY has maintained a strong foothold in the competitive Chinese fashion market.

Effective cost management

In FY2024, JNBY reported total revenue of RMB 5.238 billion, a year-on-year increase of 17.3%. This growth was primarily driven by a 10.7% rise in comparable sales across physical stores, an 18.4% expansion in online sales, and a moderate increase in store footprint. Gross margin improved to 66.3% (FY2023: 65.3%), reflecting the Company's strong brand equity and effective cost management.

Net profit surged by 36.5% year-on-year to RMB 848.1 million, with the net profit margin increasing from 13.9% in FY2023 to 16.2% in FY2024. This demonstrates significant profitability improvement. Notably, net cash inflow from operating activities increased by 70.7% to RMB 1.603 billion, showcasing a robust cash position and strong operational efficiency. With a final dividend of HKD 0.86 per ordinary share, bringing the total dividend payout for FY2024 to 97% of net profit. This reflects the Company's solid cash flow and commitment to shareholder returns.

All three brands portfolio delivered revenue growth

JNBY's diversified brand portfolio spans mature brands (e.g., JNBY), growth brands (e.g., CROQUIS, jnby by JNBY, LESS), and emerging brands (e.g., POMME DE TERRE, onmygame, JNBYHOME). In FY2024, all three segments delivered revenue growth. Core brand JNBY posted revenue of RMB 2.944 billion, up 17.1% year-on-year, accounting for 56.2% of total revenue. Growth brands generated RMB 2.184 billion (+17.0% YoY), while emerging brands contributed RMB 109.8 million (+28.7% YoY). The diversified brand strategy enables JNBY to penetrate various consumer segments and mitigate risks while enhancing market share.

The Company's dual-channel strategy, encompassing an extensive offline retail network and strong online presence, has driven stable growth. Offline channels grew by 17.1% in revenue, while online channels achieved an 18.4% increase. JNBY's active membership accounts exceeded 550,000 in FY2024, with high-value members (annual spending above RMB 5,000) reaching over 310,000. These members contributed more than 60% of total offline retail sales, underscoring the Company's success in brand building and membership operations.

As of June 30, 2024, JNBY operated 2,024 independent retail stores worldwide, a net increase of 34 stores compared to FY2023. Its offline retail network covers all provinces in mainland China and nine other countries and regions globally. The launch of ¡§JIANGNANBUYI+¡¨ multi-brand collection stores and the upgrade of store visuals have enhanced the shopping experience, boosting comparable store sales and reinforcing the Company's brand presence.

With the steady recovery of China's economy and improving domestic consumption, JNBY is well-positioned to benefit from favorable market trends. The growing demand for designer brands, particularly among younger consumers seeking personalized and sustainable products, offers significant opportunities for the Company's multi-brand portfolio.

Meanwhile, the rapid growth of digital consumption and deeper integration of online and offline channels will create new growth drivers for JNBY. The Company's investments in smart supply chains, omnichannel marketing, and new retail formats position it to adapt quickly to market changes and solidify its leadership in the designer-brand segment.

Company valuation

Considering JNBY's strong financial performance, brand advantages, and industry prospects, we remain cautiously optimistic about its future. With a net profit margin of 16.2% and robust cash flow in FY2024, the Company demonstrates a solid foundation for sustained earnings growth, we expect FY2025E & FY2026E estimated basic EPS to be RMB$1.79 & RMB$1.85 respectively, with TP is HKD17.73, implies a FY2025E P/E of 9.0x (in line with its 5 years average +1 standard deviation) and FY2025E dividend yield of ~8.9%. Our investment rating is ¡§BUY¡¨.

Risk factors

1) Consumer Demand Volatility; 2) Intensified Brand Competition; and 3) Raw Material Cost Fluctuations.

Financial

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