2022-12-03-瑞士信贷集团-Zepp_Health_Corporation_ZEPP.N__5页_348kb

Zepp Health Corporation (ZEPP.N) Equity Research Summary

Date: November 22, 2022
Rating: Maintain Neutral
Previous Rating: Neutral
Target Price: US$1.32 (down from US$2.00)

Key Highlights

1. Performance & Outlook

   • 3Q22 revenue declined 25% YoY to Rmb1.21 billion, below market expectations.
   • Self-branded products grew 4% YoY (23% YoY in North America), while MiBand shipments fell 50%.
   • Gross Margin (GM) was 19.1% (-1.0 pp YoY) due to input costs and weak consumer demand amid macro headwinds.

2. 4Q22 Guidance

   • Revenue guidance of Rmb1.1–1.35 billion implies a YoY decline of –26.3% at midpoint.
   • OpEx target capped at ~Rmb250 million per quarter from Q4 onwards.

3. Projections for 2023–2024E

   • EPS lower due to macro pressures, but partially offset by GM/OPM improvements.
   • New target price based on 4.0x P/E and revised Earnings.

Macro & Competitive Factors

• Major Overhangs:

  • Global consumer discretionary spending slowdown.
  • Geopolitical uncertainties, COVID containment measures in China.
  • Potential reduction in discretionary consumer spending.

• Competitive Position:

  • Neutral rating despite leadership in the fitness band market.
  • Positive on self-branded strategy but cautious on macro.

Financial Ratios & Risks

• Key Ratios:

  • P/E (forward 2023E): 1.5x
  • EV/EBITDA (2024E): 1.2x
  • ROE (2024E): 10.0%

• Key Risks:

  • Supply chain constraints, forex volatility.
  • Competition and pricing pressure in wearables.
  • ADR risks and geopolitical volatility.

Disclaimer

• Analysts: Clive Cheung, Kyna Wong, Tseng Chaolien.
• NEUTRAL rating reflects slow wearables cycle recovery and macro uncertainties.
• Disclosure includes conflict of interest and regional-specific legal requirements.

Summary End.