JNBY rapidly surges towards a hundred billion

Author | Zheng Qiao Editor | Zhou Zhiyu JNBY's ambitions are no longer hidden. On September 13th, at the JNBY 2024 fiscal year performance media communication meeting, Director of Investor Relations Qiang Yilan reiterated the company's unwavering goal of achieving a retail sales target of one billion in the 2026 fiscal year. To achieve this grand goal, JNBY has already taken action. In April 2024, JNBY acquired 51% of Hangzhou Huiju for 96 million yuan, bringing OMG Sports and children's clothing brand onmygame under its umbrella. This acquisition not only expanded JNBY's product line but also marked its successful entry into the sportswear market. JNBY's CFO Fan Yongkui emphasized that the company is not inclined to acquire large brands with billions of revenue but focuses on incubating its own brands while seeking cooperation with brands that share the same values and design capabilities. "We hope to acquire brands that can be empowered through existing resources and capabilities to achieve an effect where 1+1 is greater than 2." In the 2024 fiscal year (July 1, 2023 - June 30, 2024), JNBY's total revenue reached 5.24 billion yuan, an increase of 17.3% from the 2023 fiscal year's 4.47 billion yuan; net profit was 850 million yuan, a 36.5% increase from the 620 million yuan in the 2023 fiscal year. In terms of brands, the mature brand JNBY contributed revenue growth of 17.1% to 2.944 billion yuan, accounting for 56.2% of revenue; the growth brand including Sketch, jnby by JNBY, and LESS contributed revenue growth of 17% to 2.184 billion yuan, accounting for 41.7% of revenue; the emerging brand composed of POMME DE TERRE, JNBYHOME, and onmygame contributed revenue growth of 28.7% to 110 million yuan. Qiang Yilan pointed out that JNBY's brand matrix strategy has achieved significant results, with a compound annual growth rate of 14% over the past five years. Membership has always been an important driver of JNBY's performance. In the 2024 fiscal year, membership contributed 80% of JNBY's retail sales, with over 550,000 active members; the number of accounts with annual purchases exceeding 5,000 yuan exceeded 310,000, contributing over 60% of total offline channel retail sales. At the same time, JNBY is continuously optimizing the construction of a fan-centric omni-channel retail network. As of June 30, 2024, the total number of independent entity retail stores operated by the group globally increased from 1,990 on June 30, 2023, to 2,024, covering all provinces, autonomous regions, and municipalities in mainland China, as well as 9 other countries and regions worldwide For the expansion into overseas markets, JNBY stated that although they have entered the overseas market for some time, the proportion of overseas business is not high. Currently, the company is still in the exploration stage, and it is not expected to have a large-scale expansion by the 2025 fiscal year. From an industry perspective, the slowdown in growth has become a common trend in the entire apparel industry. Data from the National Bureau of Statistics shows that from January to July 2024, the cumulative retail sales of apparel goods by enterprises above designated size reached 581.88 billion yuan, a year-on-year increase of 0.1%, which is 0.7% slower than the growth rate from January to June. Although JNBY has not aggressively expanded its physical stores in the past five years, the total number of offline stores has reached 2,024 by 2024. As a Chinese designer brand fashion company, JNBY remains confident about the future. Fan Yongkui pointed out that confidence is very important. He mentioned that many people discuss whether overall consumption is downgrading, but he is more inclined to believe that consumption is becoming more rational. Consumers are not pursuing cheaper products, but products that offer value for money. Therefore, JNBY will continue to increase investment in product design and research and development. It was disclosed that JNBY's design and research expenses in the 2024 fiscal year exceeded 195 million yuan, accounting for 3.7% of revenue, with expenses growing by over 16% year-on-year. Regarding future development plans, JNBY stated that whether facing global market challenges or coping with changes in retail formats and consumer behavior, the company will always adhere to its original intention and steadily advance three key strategies: insisting on sustainable scale operation of multiple brands, adhering to design-driven operations, and deepening fan economy cultivation. Earlier on September 10th, JNBY was included in the Hong Kong Stock Connect. Despite JNBY's relatively generous dividend policy with a dividend rate exceeding 11%, market valuation does not seem to fully reflect its performance growth. When asked about whether they will take market value management measures such as repurchases after being included in the Stock Connect, JNBY revealed to Wall Street News that although the company has an annual repurchase plan, there is currently no plan for large-scale repurchases and share cancellations. With the continuous development of the fashion industry, the apparel market is facing more and more challenges. For JNBY, how to tell a good fashion story and how to turn challenges into opportunities in the new consumption cycle are particularly important