CICC: Maintains JNBY (03306) "Outperform Industry" rating, target price HK$24.97

CICC released a research report maintaining JNBY's (03306) "Outperform Industry" rating and target price of HK$24.97, corresponding to FY27/28 P/E ratios of 10.4/10.3x, implying 14% upside from the current share price. The bank maintained its FY27/28 earnings forecasts unchanged at RMB 1.07/1.13 billion, corresponding to FY27/28 P/E ratios of 9.2/9.1x. On September 23, CICC attended the company's Fall/Winter 2026 new product preview and the fifth anniversary exhibition of "Fabric Fully Utilized" and exchanged views with the company to further understand its design-driven approach, membership operation capabilities and barriers, as well as progress in building a second growth curve through a multi-brand matrix. CICC's main views are as follows: Artistic exploration and design-driven approach build product moat JNBY is a typical "design-driven" apparel company that persists in artistic exploration of a beautiful life. Its business chain does not start from commercialization; instead, designers first propose themes and concepts, followed by merchandise planning and category planning implementation. In FY26, the company invested RMB 243 million in design and R&D, accounting for 4% of revenue, far ahead of peers. It has over 100 apparel designers and more than 300 R&D personnel, including pattern makers and craftsmen. The design and R&D departments occupy nearly half of the headquarters space. The designer team enjoys a high degree of creative freedom, and the brand style is distinctive with strong continuity. Mature membership system operation, with both membership quantity and quality rising The bank stated that the company's membership operation system is mature. Based on products, it has built a benefits system centered on privileges and services, including dedicated stylists, the "Beyond the Box" subscription model, and long-term accompaniment by shopping guides. It also has rich underlying data assets, aggregating consumer purchase profiles through product tags, thereby achieving omnichannel service for a single member. In FY26, the company had over 610,000 active members, with 360,000 high-value members spending over RMB 5,000 annually, contributing RMB 5.2 billion in retail sales, accounting for over 60% of total offline retail sales. Overall, members contributed over 80% of total retail sales. Multi-brand matrix growth logic gradually materializing; Marsll collaboration reaches up to the high-end price band Over the five years from FY21 to FY26, the revenue share of the mature brand JNBY declined from 56% to 54%, while the revenue share of growth and emerging brands has approached half. Among them, in FY26, LESS revenue grew 17% year-on-year, and emerging brands Onmygame, B1ock, etc. grew 32% year-on-year, both faster than the group's overall revenue growth of 9%, becoming new engines leading growth. In addition, the company officially announced permanent ownership of the Greater China trademark for Italian handmade footwear and leather goods brand Marsll and exclusive operation. Its pricing is EUR 400-900, approximately RMB 3,000-7,000, a price band the group currently does not reach, and it can also fill the company's weak categories such as shoes and bags. The bank remains bullish on the company's multi-brand matrix opening up long-term growth space. Earnings forecasts and valuation CICC maintained its FY27/28 earnings forecasts unchanged at RMB 1.07/1.13 billion, corresponding to FY27/28 P/E ratios of 9.2/9.1x; maintained the "Outperform Industry" rating and target price of HK$24.97, corresponding to FY27/28 P/E ratios of 10.4/10.3x, implying 14% upside from the current share price. Risks Risks include intensified competition, retail sales falling short of expectations, and membership expansion speed and spending power falling short of expectations.