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波司登国际控股有限公司(3998.HK)2024/25 年中期业绩发布会
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会议摘要
Bosideng Group announced its mid-term performance for the 2024 fiscal year, showing a 17.8% increase in revenue and a 23% increase in net profit. The company emphasized its efforts in brand building, product innovation, supply chain management, and digital transformation. Despite the poor performance of the women's wear business, the company has decided to reassess its strategic position. In the future, Bosideng will focus on its core business, strengthen brand leadership and innovation, and expand its global presence to address market challenges and meet changing consumer demands.
会议速览
Bosideng Group 2425 fiscal year interim performance release conference
In the first half of the 2425 fiscal year, Bosideng Group showed a positive growth trend in its performance, with revenue increasing by 17.8%, operating profit increasing by 19.6%, and net profit attributable to shareholders increasing by 23%, achieving seven consecutive years of net profit growth greater than revenue growth. Among the various business units of the group, the down garment OEM and diversified business steadily increased, while the women's clothing business experienced a 21.5% decrease. The overall gross profit margin decreased by 0.1 percentage points, mainly due to the decline in the gross profit margin of the women's clothing business. The group continues to maintain a healthy cash flow, and has distributed mid-term dividends, demonstrating its financial stability. In addition, Bosideng Group provided a reasonable explanation for the increase in inventory levels, stating that it was a response to fluctuations in raw material prices and changes in market demand.
Financial and Business Review Report of the Company
The total value of cash and cash equivalents of the company reached 9.1 billion, with a net cash value of 6.4 billion, indicating a healthy cash flow situation. Cash outflow from operating activities increased in the first half of the year, mainly due to increased investment in early production, raw material reserves, and payment of accounts payable. Cash flow from investment activities is positive, while cash flow from financing activities is negative, reflecting an increase in dividend payouts. The debt ratio and current ratio are at historically good levels. The brand's down feather business grew by 22.7%, driven mainly by the main brand and Snow Down. Supply chain management, logistics distribution, and digital operations continue to be optimized and upgraded. Brand leadership, category innovation, channel quality, and online platforms are the highlights of the business. Women's clothing category ranked first in sales on Double Eleven, while men's clothing category ranked second. The OEM management business rose by 13.4%, achieving continued growth in performance through enhanced product development capabilities and deep cooperation with core customers.
Bosideng's strategic transformation and future development plan
Facing the overall decline in the high-end women's wear market in China and business challenges, Bosideng has decided to focus resources on its main business with great growth potential and reduce investment in women's wear business. At the same time, the group will focus on developing fashionable functional technology clothing, especially the brand's down jacket business, to enhance competitiveness through innovation and optimizing the supply chain. In addition, Bosideng also plans to further explore and expand into overseas markets to achieve the brand's global development.
Summary of Singles' Day sales and outlook for the next three years.
The focus of this discussion revolves around the sales performance of Double Eleven, the completion of annual goals, and the planning for the next three years. During the Double Eleven period, despite the long time span and large discounts, the overall GMV growth showed negative growth, with only the outdoor sector seeing growth. The company's performance exceeded the industry average, achieving over 30% GMV growth, with discounts and promotions better than last year, and an increase in average order value. The completion of annual goals faces certain challenges, especially in adverse weather conditions, but there is still hope of achieving the goals through product innovation, channel optimization, and strengthening the execution of direct stores. The future three-year plan considers the coexistence of market opportunities and challenges, and will seek innovative breakthroughs to maintain competitive advantage and achieve long-term growth goals.
Bosideng's strategic adjustments in response to market changes and competitive pressures.
With the obvious trend of consumption differentiation and the slowdown of market growth, many fast-moving consumer goods brands choose to lower prices or transform their cost-effective routes in response to changes. As a leader in the down jacket industry, Bosideng did not choose a price reduction strategy, believing that lowering prices is equivalent to suicide and lacks the possibility of long-term development. Bosideng emphasizes the long-term value of the brand and its market leadership position, believing that market competition pressure is normal, and it is important to continue to survive and develop in different market cycles in order to become the ultimate winner. In terms of marketing investment, Bosideng reevaluates its marketing strategy in an uncertain market environment to strengthen its brand image and market position.
Bosideng brand strategy and execution sharing.
In recent exchanges, Bosideng shared three key points to its brand's success: Firstly, a brand, as a protective umbrella and amulet, needs to be accumulated in the long term. Secondly, the corporate culture emphasizes continuous innovation and keeping up with the times, ensuring that the brand constantly adapts to market changes. Finally, strong execution is the key to turning the right strategy into reality. In addition, Bosideng also emphasizes the importance of marketing, seeing it as a bridge to communicate with consumers, and scientifically budgets every year to ensure that the brand can continue to grow and achieve good results. Through relentless brand management, innovation, and execution, Bosideng maintains a leading position in the down jacket field.
Citic Securities analyst questions Bosideng's performance conference.
Analysts from CITIC Securities asked questions at the Bosideng performance meeting about the impact of new product categories on gross profit margins and strategies for dealing with significant increases in down feather prices. Management responded that new product categories have a positive impact on gross profit margins, and they are balancing costs and pricing through measures such as product innovation and strategic supplier cooperation. At the same time, Bosideng has optimized its quick response supply chain to enhance product cost control and market responsiveness in order to address changes in market demand.
Bosideng Group 2024/25 fiscal year performance release conference.
At the Bosideng Group's fiscal year 2024-25 performance release conference, the group shared the performance of the fiscal year, focusing on revenue of 8.8 billion yuan, a year-on-year increase of 17.8%, as well as a net profit attributable to shareholders of 1.13 billion yuan, a significant increase of 23% year-on-year. The group emphasized its development strategy of focusing on the main business, leading with brands, and driving innovation, as well as its vision of adhering to long-termism and promoting sustainable fashion through ESG strategy. At the same time, Bosideng expressed gratitude to consumers, employees, investors, and the media for their trust and support, looking forward to future development goals and plans, demonstrating the group's determination to continue reaching new heights.
要点回答
Q:At this performance briefing, how will CFO Zhu interpret the mid-year performance of the 2425 fiscal year?
A:Mr. Zhu will provide a detailed report on the performance of Bosideng Group in the first half of fiscal year 2425, including revenue, net profit, improvement in operating quality, and dividend distribution, and analyze the performance of each business unit.
Q:How much has the revenue of Bosideng Group increased in the first half of this year? How is the growth of net profit?
A:In the first half of this year, Bosideng Group's revenue increased by 17.8%, operating profit rose by 19.6%, and net profit attributable to shareholders increased by 23%. For the seventh consecutive year, net profit growth has exceeded revenue growth, and overall operational and income quality has significantly improved.
Q:How has the group's operating profit margin growth been after excluding the women's wear business? How is the performance of raw material sales revenue and other business segments?
A:After excluding the women's clothing business, the OEM down jacket, diversified business, and school uniform business all achieved steady growth, improving the overall operating profit margin. However, the women's clothing business saw a 21.5% decline in the first half of this year. Sales revenue related to raw materials for down jackets increased by 54.5%, while the overall revenue from the women's clothing business decreased by 21.5%. In the diversified business, the school uniform business increased by 32.4%. In terms of gross profit margin, there were changes in the gross profit margins of branded down jackets, OEM processing, and women's clothing, but the gross profit margins of Bosideng's main brand and Snow Flying continue to show an upward trend.
Q:What is the reason for the increase in inventory amount? How is the growth of the brand down jacket sector and the performance of each channel?
A:The inventory amount increased by 53.4%, mainly due to significant fluctuations in raw material prices. The company has stocked up on down feathers in advance to deal with market changes, and advanced production scheduling due to the early Spring Festival. Additionally, adjustments to the integrated operation strategy for all channels have been made to accelerate delivery pace. The brand's down jackets increased by 22.7%, with the main brand and Xuedongfei experiencing higher growth rates. Sales through self-operated channels increased by over 30%, while franchise channels grew by 12.6%. The overall growth rate of all channels in the first half of the year exceeded 30% compared to the same period last year.
Q:How is the situation of cash and cash equivalents, liabilities, and current ratio?
A:As of September 30, the total amount of cash and cash equivalents is 9.1 billion, with a net cash value of 6.4 billion, indicating a healthy overall cash flow. The ratio of liabilities to current assets is at historically good levels.
Q:How does the main brand of Bosideng perform in the brand's down jackets?
A:Bosideng's main brand is still the largest contributor to the brand's down jacket sales, with its revenue increasing by 19.4%. The growth rate of self-operated channels exceeded that of franchise channels, with Xuedongfei and Bingjie increasing by 47% and 61.5% respectively.
Q:What are the highlights of supply chain management and logistics distribution?
A:In terms of supply chain management, the group's high-quality fast response supply chain has been further planned and upgraded to maintain its advantages in flexible response, scientific research and technology, and quality control. In terms of logistics distribution, the system has achieved automatic matching of the most cost-effective routes, maintaining its industry-leading position.
Q:What are the four business highlights distilled from the brand down jacket sector in the first half of the fiscal year?
A:Brand leading (such as brand activity signing and licensing, cooperation and promotion of intangible cultural heritage with modern product design), category innovation (professional development of the Jiaoyang series, urban light outdoor series sun protection clothing and assault clothing), channel quality optimization (over 30% growth in all-channel same-store sales), and online platform empowerment (promotion of digital transformation in intelligent manufacturing, smart logistics, and smart product operations through SAP new system upgrade, enhancing brand performance and market position).
Q:What is the company's strategy in terms of the supply chain?
A:In terms of the supply chain, the company will focus on digitization and intelligence as the leading factors, strengthen efficient collaborative supply centered on stores, leverage integrated operation of goods and upgrade the capability of high-quality and fast return supply of products, ensure timely supply of popular items and produce fewer unsalable items.
Q:In terms of brand leadership, how has the company positioned and enhanced its brand in the past few years? What are the plans for the future?
A:In the past few years, we have clearly positioned our brand as a global leader in introducing experts. Through international fashion weeks, national brand events, and global promotion methods, we have enhanced the brand's momentum and innovatively strengthened our connection with modern consumers, winning recognition and choices from everyone. In the future, we will continue to position the brand with a global perspective, strengthen the core competency of brand management, keep pace with market and consumer value changes, tell the story of Bossden as a global leading expert, and propel the brand towards the high end of the global industry value chain.
Q:In terms of product innovation, what work has the company done in the past few years? What are the key areas of optimization that will be focused on next?
A:In the past few years, the company has focused on fashion initiatives, functional innovation, and category expansion, launching a series of high-end outdoor wind jackets, lightweight down jackets, and storm jackets, and expanding the categories of sun protection clothing and storm jackets, winning multiple international awards. Next, the company will focus on optimizing the following three aspects: first, increasing investment in technological innovation research and development funds, building a product research and development system, strengthening digital VR intelligent design, enhancing product fashion creativity and functional technology core competitiveness; second, deepening the value of categories, creating market increments, and carrying out innovative extensions of fashion, functional, and technological core categories; third, based on the needs of consumers at different levels, providing a wider price range and a more diverse product series.
Q:Regarding channel upgrade, what changes has the company made in the past few years? What are the next steps planned?
A:Over the past few years, the company has made sweeping changes to channel quality, structure, and terminal image. Next, it will firstly categorize and optimize existing stores, improve single-store operations, enhance store operational quality and profitability; secondly, it will plan to create brand benchmark points that meet future consumption trends in first and second-tier cities and core business districts, such as the flagship store opening on July 7th in Sanlitun, Beijing.
Q:What are the company's plans for the development of overseas markets?
A:We believe that internationalization and globalization are the inevitable paths for businesses to establish global influence and industry leadership. While the company is consolidating its domestic market, it is also systematically exploring international markets, such as the re-opening of flagship stores, cross-border e-commerce trials, and overseas brand promotion activities. In the next 3 to 5 years, Bosideng's main brand will maintain its leading position in the domestic market while planning to expand into the international market, creating a benchmark brand in the European and American markets, and achieving a successful model of global operation. Furthermore, through investing in Mosserak, the company will create a more complete and three-dimensional brand matrix, laying a solid foundation for the internationalization of the brand. Additionally, the company will actively promote standardization work and ESG construction to provide a foundation for the international development of the brand.
Q:How did your company perform on Singles' Day?
A:During the Double Eleven period, if we calculate the GMV based on the Tmall criteria excluding returns, our company's growth exceeds 30%. We have continued to optimize our discounts, with this year's Double Eleven discounts being better than last year's. In addition, the average customer spending has also increased, overall evaluations are positive and ahead of the industry and platform levels.
Q:How is the overall situation of this year's Double 11, especially the growth of GMV on Tmall platform?
A:This year's Double Eleven is the longest and most discounted event in history, but overall, the GMV growth of Tmall platform without shipment is negative at around 10%. However, there is a certain amount of growth in the outdoor sector, and the final platform operation results are average.
Q:How is the completion status of this year's annual goals?
A:Currently, we are at a critical stage in achieving our annual goals. Due to factors such as weather, we have fallen slightly short of our targets in November, but this gap is within a manageable range. The development trend in the previous months has been positive, with excellent performance in innovative product categories, providing momentum towards achieving our annual goals.
Q:Can you provide a detailed explanation of the impact of channel optimization and product development on achieving goals?
A:Firstly, this year's channel optimization increased and improved the number of channels by one-third compared to last year, laying a good foundation for winter sales. Secondly, in terms of product development, in addition to upgrading classic styles, innovative categories have been added. These new categories have shown significant growth since their launch, gaining favor among consumers and providing continuous momentum for future sales.
Q:What is the role of direct-operated stores in achieving goals?
A:Directly operated stores play an important role in achieving execution effectiveness. Especially when the weather conditions are unfavorable, by focusing on core stores and paying attention to concentrated customer flow areas, the performance of stores is effectively improved, ensuring the smooth execution of overall goals.
Q:How does Bosideng respond to the current market pressure of consumer differentiation and fast-moving consumer goods brands transforming to lower prices? With the current market growth slowing down, will Bosideng reevaluate its marketing investment strategy?
A:As a leading brand in the down jacket industry, Bosideng has not chosen price reduction as a response strategy, because in the long term, price reduction is equivalent to suicide with no future. Instead, Bosideng is committed to expanding the down jacket category and the current market demand is extremely high, with various brands entering the market, providing the company with development opportunities. Bosideng has invested a lot of resources in strengthening its brand image and will adjust its marketing strategy according to the actual situation in response to market changes, but will not blindly follow the trend of price reduction. As an industry leader, Bosideng is confident in maintaining brand leadership while adapting to market changes and finding a path to sustainable growth.
Q:Under the pressure of market competition, how does Bosideng cross the cycle to become the king of winners and maintain a good development status at each stage?
A:Bosideng achieves this goal through several key points. Firstly, brand building serves as our protective umbrella and talisman, with high visibility and a leading position in the category race providing us with a competitive advantage. Secondly, the company's culture is to strive for excellence, continuously keeping up with the times, constantly adjusting strategic goals and paths to adapt to new competitive dynamics. Furthermore, we focus on innovation and breakthroughs, constantly researching and implementing new strategies to maintain development momentum. Lastly, strong execution is an important factor in ensuring the success of the strategy. The Bosideng team always maintains efficient execution, able to maintain strong development momentum regardless of changes in the market environment.
Q:How does Bosideng maintain a strong team state and good business results during market fluctuations?
A:Bosideng team can maintain high morale in any market conditions, thanks to our corporate culture which emphasizes continuous innovation and execution power. Even when facing challenges, we will learn from past experiences, continuously improve and innovate, while leveraging the strong execution power of the team to ensure that all strategies are effectively implemented.
Q:What is Bosideng's investment strategy in the marketing module?
A:Excellent brand marketing is essential, as it allows high-quality products to effectively communicate with consumers. Bosideng brand formulates scientific marketing budgets every year based on the achievement of annual goals and the future needs of brand development. From the practice of the past six or seven years, it can be seen that the combination of strategies we have adopted in the brand marketing module has achieved significant results, and we will continue to focus on this module to help the brand continue to progress and develop.
Q:How does the rapid expansion of new product categories affect the overall gross profit margin of Bosideng, and how to balance the relationship between pricing and gross profit margin of down products during the peak season in the face of a sharp rise in down prices?
A:New product categories such as spring and summer functional products, especially sunscreen and outdoor clothing categories, have achieved double-digit growth in the past three years, with an increase in both quantity and price, winning recognition from mainstream consumers and positively impacting the company's overall gross profit margin. In response to the significant rise in down prices, we will balance the gross profit margin through cost management and optimizing product structure, to ensure the rationality of pricing and market competitiveness of down products during peak season.
Q:How is the gross profit situation of the new product category? What impact do the spring and summer functional new product categories have on the company's gross profit?
A:The profit margin of the spring and summer functional new products category may be lower internally compared to down jackets, but the external pricing is higher than most other functional outerwear brands. Because this new product category can effectively link the target consumers of high-quality channels and improve store operation efficiency during off-seasons, it has a positive impact on the company's overall profitability.
Q:How can the innovation of down jackets achieve a positive contribution to gross profit categories?
A:By adjusting the product category structure upwards, we diligently create innovative products to meet consumer demands and create cost-effective and emotional value. For example, we successfully innovated a new product category that has gained consumer acceptance, bringing positive contributions to the profit category.
Q:In the face of a significant increase in down prices, how does the company control raw material costs?
A:After foreseeing a rising trend in prices of raw materials like down in the second half of the second and third fiscal years, the company has proactively implemented a raw material management strategy. This includes establishing a cooperative alliance with strategic suppliers, conducting pre-emptive price adjustments and mandatory stocking to ensure that the company's core material prices remain competitive.
Q:How to balance product pricing, costs and gross profit?
A:For classic market models, adjusting the structure to control costs, such as extending the production cycle in advance to ensure cost control, and balancing pricing, gross profit margin, and sales through scientific and systematic pricing. For innovative product categories, rational pricing is based on analyzing the cost-effectiveness of target consumers to ensure that new product categories also contribute positively to gross profit.
Q:What optimizations and improvements does the company have in the fast-response supply chain in order to demonstrate advantages in the growth rate of distribution channel revenue? What optimizations and improvements does Bosideng have in the fast-response supply chain this year?
A:The optimization and enhancement of the company's fast-response supply chain include: 1) In terms of flexible fast response, by producing popular products in advance, extending the order cycle to control costs, and using planning systems and smart manufacturing factories to support innovative fast supply of popular products; 2) In inventory management, strategically slowing down shipments to franchisees to cope with the uncertainty of the consumer market in the second half of the year; 3) Increasing efficiency through integrated operation of commercial flows, achieving resource sharing between online and offline channels, and improving the efficiency of product circulation and sales effects. Bosideng's optimization and enhancement of the fast-response supply chain this year are reflected in three aspects: first, controlling product costs through a flexible fast-response model, including producing popular products in advance and extending production cycles; second, accelerating the supply of innovative popular products, using digital intelligent planning systems and smart manufacturing factories to ensure market demand while controlling inventory risks; and finally, strengthening integrated operation and management of products, using intelligent product operation systems to achieve shared goods between online and offline channels, and enhancing overall operational efficiency.
Q:How will Bosideng's main brand position itself around the leading global down expert brand, and carry out market layout and brand management?
A:Bosideng's main brand will focus on the mid-to-high-end urban market by strengthening brand leadership, category management, channel operations, and customer experience. Specific measures include consolidating its leading position in the domestic market, carrying out global promotion of the brand to expand into international markets; for non-brand product lines, the focus will be on high cost-effectiveness and the mass market. Xuezhongfei brand plans to enhance its brand fashion, sports, and ice and snow genes, with online and offline collaboration to expand its market share in the high cost-effective farmer market. Borgna brand will focus on the high-end skiing fashion and sports crowd in China, strengthening its high-end professional skiing brand recognition in consumers' minds. Mercer Nike brand is positioned for high-end, luxury, trendy crowd, aiming to create a globally top wet lead-in clothing brand.
Q:How does Bosideng view the role of brand leadership and innovation driven, and how to create value for customers? How does Bosideng view the opportunities and challenges in China's economic development, and the future development plan?
A:Bosideng insists that the brand is the lifeblood of the company, continuously implements brand development strategies, and forms a brand-led development model. Through continuous innovation in products, retail, supply chain, digitization, etc., with meeting consumer demands as the core, the company creates value with high-quality products and services. In particular, in the aspect of technological innovation and research and development, the company will increase investment in special funds, establish a product research and development system, develop new materials, categories, technologies, and reinforce digital AR intelligent design. By collaborating with international design institutions and universities, the company aims to enhance brand value and core competitiveness through technological innovation. Bosideng firmly believes that in the vibrant environment of China, with the deepening of the reform and the advancement of China's modernization proposed at the 19th National Congress of the Communist Party of China, private enterprises and entrepreneurs have the confidence and courage to reach new heights. The company will seize the pulse of the times, focus on core business, insist on brand leadership, strengthen innovation-driven development, practice corporate culture, embark on a new journey of leading Bosideng in China to the world, and contribute to the building of a strong brand nation and the realization of China's modernization.
Q:How does Bosideng adapt to the changing needs of consumers in the new era of consumption and provide a better value experience?
A:In the new era of consumption, Bosideng realizes that consumers are not just buying products and services, but also purchasing the value experience of consumption, including the emotional value provided by the brand. Therefore, the company will continue to iterate products, expand categories, and enrich scenarios, enhancing the value and experience of products, keeping up with social progress and changes in consumer values, constantly iterating and surpassing itself, creating value for consumers.
Q:How does Bosideng persist in long-termism and promote sustainable high-quality development of enterprises?
A:Bosideng has always upheld the long-termism and value creation concept, integrating social responsibility into the practice of corporate development, especially in the areas of environmental protection, social responsibility, and corporate governance to explore a sustainable path to high-quality development. This year, it has clearly proposed an ESG strategy vision oriented towards consumers, and set a goal to achieve operational emission targets by 2038. The company will align with the United Nations Sustainable Development Goals and national ecological strategies, gradually promote green production, lead green consumption, strive to become a leading enterprise in ESG capabilities, and work together to build a community of shared future for humanity.
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