Semir Clothing (002563): Children’s clothing leader has obvious advantages, leisure reform is steadily advancing

Semir Clothing (002563): Children’s clothing leader has obvious advantages, leisure reform is steadily advancing

The performance of the main business in the weak market environment exceeded expectations. Product strength improvement / supply chain efficiency / channel structure optimization and orderly expansion drove 18 years of main business revenue growth of 24%. Among them, children’s clothing and casual wear revenue increased by 27% and 21% respectively.

Excluding the impact of consolidation, the net profit realized by the main business is expected to be 1.5 billion +, an annual increase of 35%.

Kidiliz’s consolidated income and net profit were 7, respectively.

9.5 billion and -35.55 million.

Looking forward to 19 years, under the continuous improvement of Semima casual wear operation, it is expected to maintain stable operation.

While maintaining absolute leading height, Balla and TCP, Kidiliz play complementary effects in brand positioning and customer base, and produce synergistic effects in product development, international market operations and global procurement.

It is expected that the performance of the main business in 19 years will still maintain a double-digit growth, but considering that Kidiliz has not yet turned losses, it is expected that 佛山桑拿网 the growth of net profit will be worse than the income.

The current market value is 2.93 million yuan, corresponding to 19PE15.

6X, estimated not high, maintain “strongly recommended-A” grade.

In 18 years, the main business grew faster than expected, and the negative goodwill generated by Kidiliz caused an increase in non-operating income and increased profit elasticity.

In 2018, the company achieved total operating income of 157.

190,000 yuan, an increase of 30 in ten years.

71%; operating profit and net profit attributable to mothers are 20 respectively.

80 and 16.

94 million, an increase of 37 each year.

65% and 48.

83%; realized profit of 0.

63 yuan.

The distribution plan is distributed for every 10 shares 3.
.

5 yuan (including tax).

Among them, the main business income of Semir in 18 years increased by 24% to 14.9 billion US dollars, achieving a net profit of 15.

370,000 yuan, an increase of 35 in ten years.

06%.

Kidiliz’s consolidated income scale is 7.

95 ppm with an impact on net profit of 1.

5.7 billion (consolidated net profit was -35.55 million yuan, and the consolidated income was 1.

9.3 billion negative goodwill).

By quarter, affected by the consolidation, 18Q4 revenue increased 49 year-on-year.

47% to 59.

550,000 yuan, the operating profit increases by 201.

18% to 3.

310,000 yuan, net profit attributable to mother increased by 235.

16% to 4.

2.2 billion.

Driven by the enhancement of product power / supply chain efficiency / channel structure optimization and orderly expansion, the main industry’s revenue growth exceeded expectations. The co-location of Kidiliz in October pulled the balance sheet, accounting for 31% of total revenue growth.

1) By brand: 18 years of main business income increased 24% to 149 per year.

2.4 billion.
Among them, the top of the children’s clothing Para brand is solid, and the revenue in 18 years has increased by 27.
03% to 80.

3 billion, accounting for 53.

81%, the number of stores increased by 498 to 5293, the same-store growth was gradually double growth; casual wear business revenue in weak urban environments increased by 20.

54% to 67.

92 million, a net increase of 202 stores to 3830, the same double-digit growth is expected.

Kidiliz consolidated in October 18, and the consolidated income was 7.

950,000 yuan, net profit 35.55 million yuan.

2) Sub-channels: Long-term main business direct operating income will increase by 20 per year.

37% to 17.

6.2 billion, of which direct sales increased by 84 to 763.

Funding revenue of the fundamental business has increased by 22 per year.

03% to 89.

9.6 billion, of which a net increase of 616 franchise stores to 8,360.

The initial e-commerce business income has increased by 30 per year.

75% to 40.

8.1 billion.

From the date of consolidation, Kidiliz’s direct, franchise, affiliate, and e-commerce revenue contributions have been 3 respectively.

2.3 billion, 3.

2.2 billion, 1.

04 trillion, 27.83 million yuan.

By the end of 2018, the number of directly operated / joined / affiliated stores was 455/47/280.

The increase in the gross profit margin of the main business was greater than the increase in the expense ratio, and the negative goodwill generated by Kidiliz led to an increase in non-operating income and improved profit elasticity.

1) Gross profit margin increased significantly: The gross profit margin of the apparel industry increased 4.

18pct to 39.

95%, of which the gross profit margin of casual wear increased by 7.

67 points to 36.

98%, children’s clothing business gross margin increased by 0.

71pct to 42.

twenty three%.

The increase in casual apparel gross profit was mainly due to the increase in resale, the increase in the proportion of regular-price products sold offline, the discounts tightened, and the increase in the proportion of new products with high gross profit margins online;This is due to the consolidation of Kidiliz with a high gross profit margin.

2) The expense ratio increased slightly during the period: the company’s overall expense ratio increased by 2.

19 points to 21.

51%, of which the sales expense ratio increased by 1.

69pct to 16.

35%, mainly due to the company’s enhanced marketing efforts and consolidation of Kidiliz.

Management fee rate increased by 0.

33 points to 5.

64%, mainly due to the company’s increased spending on attracting talented employees and the merger of the French Kidiliz Group; due to the increase in interest expenses on consolidation, the financial expense ratio increased by 0.

18 points to -0.
48%.
3) The asset impairment in 18 years increased by 86 in ten years.

13% to 8.

6.7 billion.

Among them, bad debt losses, inventory depreciation losses, long-term equity investment impairment losses, investment real estate impairment losses, fixed asset impairment losses, and goodwill impairment losses were 18.38 million yuan and 5, respectively.

570,000 yuan, 2.57 million yuan, 2.

0.6 million yuan, 46.51 million yuan and 37.20 million yuan.

Among them, the loss of inventory price loss increased by 28 each year.

37%, and long-term equity, investment real estate, fixed assets impairment, goodwill impairment replacement for a lump sum of 18 years.

4) Increased income from financial management, etc. Expected investment income increased by 47.9 million yuan.

5) Net profit margin increased by 1.

3 points to 10.

7%, net profit growth is faster than income growth: excluding 35.55 million yuan in operating benefits brought by Kidiliz’s consolidation and negative goodwill (embodied in non-operating income subject 1).

9.3 billion), the main business is expected to achieve a net profit of 15 in 18 years.

370,000 yuan, an increase of 35 in ten years.

06%.

Consolidation has led to an increase in the size of inventories and accounts receivable, and an increase in the impact of expenses and expenditures. The net cash flow from operating activities has been significant.

1) At the end of 18, the company’s inventory scale increased by 85.

27% to 44.

US $ 1.7 billion, mainly due to the increase in sales and the corresponding increase in stocks and the merger and transfer to the inventory of the Kidiliz Group.

2) At the end of 18, the scale of accounts receivable of the company increased by 37.

30% to 19.

US $ 5.3 billion, mainly due to the merger and transfer of accounts receivable to the Kidditz Group 3) Net cash flow from operating activities decreased by 56.

41% to 9.

5.5 billion.

Among them, the net net increase in cash from operating activities increased by 40% per year, mainly due to the increase in business growth, leasing fees, advertising expenses, transportation and miscellaneous expenses, and service fees, as well as the merger of the French KIDILIZ Group.

Profit forecast and investment suggestions: The company’s casual wear and children’s wear business is operating steadily with continuous improvement in product power improvement, supply chain efficiency improvement, channel structure optimization and other aspects.

TCP, Kidiliz and Balla brand play complementary roles in brand positioning and customer base, and have integrated value in product development, international market operations and global procurement.

In a weak market environment, the company, as a leader in mass leisure and children’s wear, has a sustainable and stable growth alternative for the main business. However, considering that Kidiliz has not yet turned a deficit, it is expected that the net profit performance in 19 years will be less than revenue.

It is expected that EPS for 2019-2021 will be 0.

69, 0.

80 and 0.

92 yuan, the current total market value of 29.3 billion, corresponding to 19PE15.

6X, not high estimate, maintain investment rating of “Highly Recommended-A”.

Risk warning: terminal consumption continues to weaken, the risk of increased inventory, the performance risk of the acquisition company.