CICC has published a research report reaffirming its profit forecasts of RMB 4.3 billion and RMB 4.6 billion for Bosideng (03998) for fiscal years 2027 and 2028, respectively, with the current share price trading at 9x and 9x price-to-earnings ratios for those periods.

The brokerage maintains its Outperform rating and HK$5.65 target price, which corresponds to 13x and 13x forward P/E multiples for FY27 and FY28, implying a 38% upside from the current price level. CICC is taking a positive stance ahead of the peak season, projecting flat year-on-year revenue for 1HFY27, while anticipating a modest net profit increase supported by stringent cost controls, with results aligning with its expectations.

Recent Developments and Key Insights

Following recent discussions with management, CICC notes that the group's retail sales continued to grow steadily during 1HFY27, underscoring the competitive strength of its leading brand. During the same period, the group deliberately moderated its shipping pace to establish a solid foundation for healthy operations throughout the peak season.

Supported by new product launches, the group achieved high-quality retail growth in 1HFY27 despite a fluctuating consumption environment. From April to August, retail sales for the main Bosideng brand grew at a rate surpassing the industry average, with CICC projecting double-digit year-on-year growth in main brand retail revenue for those months. On a channel-by-channel basis, online retail revenue growth of approximately 20% outpaced offline channels, which saw mid-single-digit growth; direct-operated retail revenue growth exceeded 10%, driven by same-store sales gains, outperforming the low-single-digit growth of distribution channels.

The company has refined its spring and summer product mix by deliberately reducing lower-priced sun-protection items and expanding newer, higher-value lines such as AREAL, using these new products to drive sales momentum.

Deliberate Shipping Adjustments for Full-Year Growth

CICC projects a slight decline in main brand revenue for 1HFY27, with direct-operated revenue growing at high single digits in line with end-market retail trends. Distribution channel revenue is expected to see some softening, as the company leverages its rapid-response capabilities amid weather volatility and intentionally slows shipping to maintain healthy channel inventory levels.

In other business segments, CICC anticipates that Snow Flying will sustain double-digit revenue growth in the first half of the fiscal year, while OEM revenue is projected to grow at mid-to-high single digits.

The group is preparing extensively for the peak selling season across multiple fronts. On the channel side, it is implementing cross-management based on city tier, mall type, store format, and product category to precisely match products with consumer segments and boost conversion rates. On the product side, it is intensifying innovation efforts, raising the share of new product orders, and ensuring its four core mind-share categories cover diverse customer groups and price ranges, while also increasing the proportion of first orders for key styles and top-selling items year over year.

The group remains confident in its full-year performance, keeping its revenue and profit guidance unchanged.