CICC: Covered Yuyuan Group (00551) for the first time and gave a “outperforming industry” rating with a target price of HK$19.46
The Zhitong Finance App learned that CICC released a research report saying that Yuyuan Group (00551) is a leading global sneaker manufacturer. At the same time, it also lays out the sneaker and apparel retail business in Greater China. Production capacity overseas is at the forefront, and the global production base layout is diversified. The first coverage gave an outperforming industry rating. The target price was HK$19.46, corresponding to 10.5 times P/E in 2026.
CICC's main views are as follows:
The sneaker industry has a broad space and a concentrated pattern. Yuyuan Group is a leader in sports shoe manufacturing, taking into account the sports shoes and clothing retail business
According to Euromonitor, the global sneaker volume is US$167.7 billion in 2024, and it is expected that the number of units will continue to grow over the next 5 years. The share of global sneaker brands is concentrated, with CR10 reaching 57% in 2025. The footwear industry is also showing a concentrated pattern. Yuyuan Group is the world's largest sneaker manufacturer. The bank estimates that the share of shipments exceeds 10%. The subsidiary Baosheng International is a leading sportswear retailer in Greater China. In 2024, Yuyuan Group's revenue/net profit to mother was US$81.8/390 million, with manufacturing accounting for 69%/89% of revenue/net profit attributable to mother, and retail business accounting for 31%/11% of revenue/net profit attributable to mother.
Bind high-quality growth customers with development capabilities, and lead the global layout in production capacity
The company has strong ability to develop high-end footwear, so it is deeply tied to the top two international brands Nike/Adidas, and has long-term cooperation with world-renowned brands such as Asics, New Balance, Salomon, and Arc'teryx. The bank estimates that the company's top 5 customers account for a high level of 80-90% of manufacturing business revenue. Furthermore, the company's overseas production capacity is at the forefront, and the layout of global production bases is diversified.
Overseas brand inventories are at a manageable level and product innovation is accelerated, and manufacturing business performance is expected to return to steady growth
Tariffs were disrupted or weakened in 2026, and customer inventories of Yuyuan Group's major brands were in a manageable state. Brands represented by Nike accelerated product innovation and superimposed the growth of several high-quality brands. The bank expects steady growth in the manufacturing business revenue side in 2026. At the same time, the bank expects manufacturing business performance to recover.
Differences from the market
The bank is more optimistic that the company will restart growth after actively optimizing the number and structure of customers, bind the performance certainty brought by high-quality brands with development capabilities and global production capacity layout, and predicts a dividend rate of 8.2% in 2026, providing a margin of safety. Potential catalysts: Customer recovery progress and orders exceeded expectations, and productivity improvements exceeded expectations.
Profit forecasting and valuation
The bank expects the company's 2025-2026 EPS to be $0.23 and $0.24 respectively, and the 2024-2026 CAGR is -0.4%. The current stock price corresponds to 8.6 times 2026 P/E. Based on the 2026 10.5 times P/E target price of HK$19.46, there is 23% upside compared to the present, and the first coverage gives a rating of outperforming the industry.
Risk warning: Customer orders fall short of expectations, capacity expansion and climbing fall short of expectations, and repeated tariff risks.