Morningstar

Shenzhou International Group Holdings Ltd 02313

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Stock XHKG Rating as of
HK$68.15 −4.80 (6.58%)
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As of Delayed Price Open

Company Report

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Shenzhou Earnings: Strong Uniqlo and Adidas Demand Offsets Nike Weakness; Shares Undervalued

Ivan Su

Narrow-moat Shenzhou’s interim results were broadly in line with our expectations, and management maintained its 2024 guidance. We fine-tune our earnings estimates and maintain our HKD 124 fair value estimate unchanged. With shares trading at around 15 times consensus earnings for 2024 versus a historical average of 20-plus times, we think Shenzhou is undervalued.

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Price vs Fair Value

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02313 is trading at a 893% premium.
Price
HK$72.95
Fair Value
HK$466.00
Uncertainty
High
1-Star Price
HK$992.10
5-Star Price
HK$77.40
Economic Moat
Qxpzd
Capital Allocation
Bxvcmhfy

Bulls Say, Bears Say

Bulls

Large-scale apparel manufacturers compete on the basis of specialization and the provision of additional apparel-related services; with integrated Shenzhou atop of its peers in these areas.

Bears

Athleisure has come a long way, and signs of saturation are emerging. A slowdown in sportswear sales worldwide will damage Shenzhou’s top line.

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News

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Trading Information

Previous Close Price
HK$72.95
Day Range
HK$67.10–73.35
52-Week Range
HK$54.80–87.25
Bid/Ask
HK$68.10 / HK$68.20
Market Cap
HK$102.44 Bil
Volume/Avg
5.3 Mil / 5.7 Mil

Key Statistics

Price/Earnings (Normalized)
18.82
Price/Sales
3.83
Dividend Yield (Trailing)
3.19%
Dividend Yield (Forward)
3.43%
Total Yield
3.19%

Company Profile

Shenzhou is the largest vertically integrated knitwear manufacturer in the world. The group mainly produces sportswear (75% of 2022 revenue), casual wear (21% of revenue), and lingerie (3% of revenue) for international clients such as Nike, Adidas, Puma, and Uniqlo. Mainland China is its largest market, accounting for 26% of sales in 2022. This is followed by Europe, the US and Japan. Shenzhou currently operates manufacturing plants in China, Cambodia, and Vietnam.
Sector
Consumer Cyclical
Industry
Textile Manufacturing
Stock Style Box
Large Core
Total Number of Employees
101,720
Website
http://www.shenzhouintl.com

Competitors

Valuation

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Metric
02313
02020
ADDYY
Price/Earnings (Normalized)
 18.8223.0034.93
Price/Book Value
 2.994.698.73
Price/Sales
 3.834.101.95
Price/Cash Flow
 17.5715.3130.86
Price/Earnings
02313
02020
ADDYY

Financial Strength

Metric
02313
02020
ADDYY
Quick Ratio
 1.991.210.64
Current Ratio
 2.541.591.27
Interest Coverage
 13.5531.152.81
Quick Ratio
02313
02020
ADDYY

Profitability

Metric
02313
02020
ADDYY
Return on Assets (Normalized)
 11.15%14.49%2.20%
Return on Equity (Normalized)
 16.19%25.32%8.46%
Return on Invested Capital (Normalized)
 10.81%15.73%5.02%
Return on Assets
02313
02020
ADDYY

Textile Manufacturing Industry Comparables

Screen With Investor
1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Shenzhou International Group Holdings Ltd
SZHIF
—Wqrksjh$14.1 Bil
 Toray Industries Inc ADR
TRYIY
—Tqwf$9.3 Bil
 Toray Industries Inc
TRYIF
—Lfw$9.3 Bil
 Albany International Corp
AIN
—Dhccdv$2.7 Bil
 Coats Group PLC
CGGGF
—Ylbwxg$2.1 Bil
 Lenzing AG
LNZNF
—Wndjh$1.5 Bil
 Seiren Co Ltd
SERNF
—Vcwf$1.0 Bil
 Unifi Inc
UFI
—Xyc$126.1 Mil
 Aquafil SpA
ECNLF
—Hpyj$107.7 Mil
 Culp Inc
CULP
—Sggss$76.1 Mil

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