Hailan House (600398) 2019 Interim Review: Major Brands Stable, New Brands Maintained High Growth
Investment Highlights The company released its 2019 interim report and achieved revenue of 107.
2.1 billion (+7.
07%), realizing attribution / deduction of non-net profit 21.
90 trillion, each year +2.
Q2 achieved revenue of 46 in a single quarter.
3.3 billion (+9.
58%), and the growth rate increased QoQ (Q1 + 5).
23%), and realized non-net profit attributable to mothers / deductors9.
36 trillion, each year -2.
The gap between the growth rate of income and profit is mainly due to the increase in the amortized bond index, and the increase in the expenses of “boys and girls” or new brand incubation expenses consolidated in 18Q4.
The growth of the main brand accelerated, and the new brand grew rapidly.
①Hailan House Series 19H1 achieved income of 86.
28 trillion, ten years +5.
05%, the growth rate increased sequentially (19Q1: 2.
The growth was mainly due to the expansion of channels. The proportion of stores increased by 152 at the end of 18 to 5,449, of which direct sales / affiliate stores were 250/5199 (+ 69 / + 83).
The store efficiency remained stable, and the main brand is expected to increase by about 2%.
The previous gross profit margin was the highest +1.
17PCT to 44.
56%, mainly due to the increase in the proportion of direct sales channels benefiting from high gross profit (18H1 / 19H1 ratios were 2 respectively.
9% / 6.
② Aiju Rabbit achieved income5.
4.7 billion (-9.
79%). The decrease in revenue was mainly due to the continuous optimization of the channel structure (street stores shifted to shopping malls and shopping centers), with a net decrease of 40 stores to 1,241.
At the same time the gross profit margin was -16 years.
54PCT to 12.
50%, mainly due to the weak consumption of women’s clothing in the first half increased due to the strength of terminal discounts.
③Hailan Select / AEX / OVV / boys and girls have achieved rapid growth, the expected income is + 321% / + 238% / + 625% / + 50% +, while contributing a total of 3 income.
08 thousand yuan.
In addition, San Keno performed solidly and achieved revenue9.
36 trillion, ten years +12.88%.
Expansion of direct sales channels drove a substantial increase in revenue, and e-commerce made efforts to improve Q2 on the new platform.
① Offline 19H1 achieved revenue of 94.
8.3 billion (+7.
18%), of which direct channel revenue increased by 132.
91% to 5.
94 million, mainly benefited from the number of stores exceeding +291 to 408, an increase of 248.
72% (a net increase of 117 in 19H1).
Revenue from franchise channels increased by 3.
45% to 88.
90 trillion, the number of its stores increased by 1352 to 7,332 each year, of which 19H1 net increase of 78.
② Online income 5.
820,000 yuan (+0.
28%), Q2 is faster than Q1 (Q1 / Q2 increase is -5 respectively.
9% / 5.
95%), mainly benefiting from the company’s active development of social e-commerce platforms, increasing brand traffic entry, effectively converting social traffic into company fans and customers, and improving customer experience and stickiness.
Gross profit margin continued to increase, and cost growth resulted in a slight decrease in net profit margin.
The company’s gross profit margin increased by 1.
08PCTs to 41.
67%, mainly benefiting from the increase in gross profit margin of the main brand with 80% of revenue (+1.
In terms of expenses, the sales expense ratio increased due to the increase in direct-operated stores in the short term1.
61 PCT to 9.
27%. The management expense ratio (including R & D expenses) increased by 0 due to the increase in employee compensation and depreciation booths.
98PCT to 5.
At the same time, there was a total increase of 56.69 million yuan in fair value changes, mainly due to the shareholding of Jiangsu Bank and the appreciation of transactional financial assets brought about by investment wealth management income.
Taken together, the company’s net margin was -0 for ten years.
93 PCT to 19.
Inventory scale was effectively controlled, and cash flow from operating activities was reorganized.
The company’s inventory balance was 88.
42 trillion, excluding the consolidation factor, the scale of the main brand’s inventory fell by about 1 billion to about 6 billion compared with the beginning of the year, which was mainly due to the increase in the main brand’s replenishment rate under the company’s refined order management.
Therefore, the inventory turnover days during the same period are also -23 days to 264 days compared with the beginning of the year.
The balance of accounts receivable and bills for the same period was 7.
91 trillion, +14 from the beginning of the year.
97%, mainly due to the increase in shopping malls and shopping mall stores, and the channel has an accounting period.
In addition, net cash flow from primary operating activities was 4.
99 ppm, Q1 / Q2 is 12 by season.
22 / -7.23 ppm, net cash expenditures for Q2 operating activities, mainly due to the reorganization caused by the centralized settlement of some franchised stores and payment of the split payment.
Overall, cash flow is expected to remain stable.
Profit forecast and investment advice.
The leading domestic brand of men’s men’s wear of the main brand is solid, and the product power is enhanced by creating explosive models (2019H1 cooperation IP makes trouble in the palace department, new products are quick-drying models, etc.), and at the same time, the efficiency of the supply chain is improved (enhancing support for core suppliers, improving product quality andThe proportion of replenishment orders), inventory structure improvement, channel optimization (increased proportion of shopping mall stores) is expected to maintain stable growth.
The strong performance of the new brand helped the company’s performance to grow steadily.
In 武汉夜网论坛 addition, the consolidation of Ying’s in the second half of the year is expected to contribute approximately 5 trillion revenue and 3 million net profit to the company.
In the long run, the company has played a platform role, promoted the informatization layout, continued to optimize the channel structure and deepened the cooperation with core suppliers, in order to continuously improve the efficiency of the supply chain and the synergy of multi-brand operations, and forged strong competition barriers for the company’s long-term development.
At the same time, the company’s underestimated high yield can also bring deterministic returns to investors.
The 2019/20/21 results are expected to be 37.
80,000 yuan, the corresponding EPS is 0.
95 yuan, corresponding estimates are 10/9/8 times, maintain “Buy” rating.
Risk warning: weak consumption, sales exceeded expectations; new brand cultivation is not up to expectations.