Biyin Lefen (002832): Interim report performance exceeds market expectations. Increase in gross profit margin highlights company products and strengthens channel competitiveness.
The company has announced the 2019H1 results announcement, and the results exceeded market 合肥夜网 expectations.
In addition to commenting on the company’s semi-annual performance in this report, we also hope to analyze in depth the issue of store space that investors care about: the issue of store space: The company disclosed in the announcement for the first time that the store space is 1500-2000.
1. Performance: 19H1 performance exceeded market expectations The company’s 2019H1 performance report announced by the company in the first half of 19 achieved revenue8.
4.6 billion (+25.
15%), net profit attributable to mother 1.
7.4 billion (+42.
01%), deducting non-attributed net profit 1.
6.5 billion (+44.
63%), the performance exceeded market expectations.
In the single quarter of 19Q2, the company’s second-phase employee stock ownership plan produced 1333.
The fair incentive expenses of RMB 7,000, if the influence of the company’s fair incentive expenses is excluded, the company’s net profit attributable to the mother will be realized in 19H1.
8.7 billion (+52.
89%) and realized a deduction of non-net profit of 1.
7.8 billion (+56.
31%), maintaining rapid growth.
1) After deducting the impact of fair incentive expenses: 19Q2 revenue in a single quarter3.
7.4 billion (+22.
45%), net profit attributable to mother is 4,400.
10,000 yuan (+17.
32%); if we exclude the effect of equity incentive expenses, the company’s net profit attributable to its parent in the single quarter of 19Q2 was 5,733.
10,000 yuan (+52.
86%), still maintaining relatively rapid growth.
2) Deduction of income tax expenses: The income tax expenses of the company in 19H1 were 2726.
260,000 yuan, as the company obtained the “Emerging Enterprise Certificate” on November 28, 2018 and enjoyed the preferential policy of collecting corporate income at a 15% tax rate for three consecutive years (2018-2020).Reduced, the income tax expense for the company in 19H1 was 2,726.
260,000 yuan (-40.
22%), if we exclude the impact of income tax reduction (that is, restore at 25% interest rate growth rate), we degraded the 19H1 company to achieve net profit1.
5.4 billion (+26.
23%), and still maintain rapid growth.
3) If the impact of fair incentive costs and subsidy costs is not considered, the company’s net profit attributable to the mother will be realized in 19H1.
6.4 billion (+34.
43%), maintaining rapid growth.
2. The online Tmall flagship store opened, and the channels continued to be expanded offline. We expect the company to open 1,500-2,000 stores.
Offline channels: As of June 30, 2019, the company has 798 terminal sales stores, a net increase of 34 compared to the end of 2018, of which 385 directly operated stores, a net increase of 20; 413 franchised stores, a net increase of 14 Family.
In addition to digging high-end communities in first-tier and second-tier cities as potential markets, the company will further sink the market to the fast-growing third-tier and fourth-tier cities. We estimate the company’s store opening space to be around 1,500-2,000.
Online channels: The company ‘s flagship Tmall Tmall online store in 19H1 officially opened. The “offline + online” channel layout will provide customers with more consumer experience.
3. The company’s gross net profit margin increased, and its profitability improved. The company’s gross profit margin in 19H1 was 67.
67pct), gross profit margin increased slightly, we think it is mainly related to the company’s increased product discounts and the proportion of directly operated stores; 19Q2 gross profit margin was 71.17% (+7.
4pct), rising amplitude cracks.
We think it’s better than Inlefin.
Because its products have the style of sports commerce, and also have characteristics in design, fabric, color and style, there are obvious differences from other brands in the market, and there is less competition pressure; meanwhile, the company’s terminal sales are good, the discount rate is well controlled, and the futureInterest rates are expected to continue to rise.
Expense ratio: The sales / management / financial expense ratio of the company in 19H1 is 30.
31 points), -0.
Among them, the sales expense ratio has improved. The increase was mainly due to the increase in business scale and store operation and packaging and transportation expenses. The increase in management expense ratio was mainly due to the additional incentive fee 1333 in 19H1.
At the same time, the company expanded R & D investment and increased R & D expenses by 89.
56%; the slight increase in the financial expense ratio was due to a decrease in interest income.
In the single quarter of 19Q2, the company’s sales / management / financial expenses were 39.
6 points), 17.
Net profit margin: As the company’s gross profit margin increased by more than the expense ratio, the company’s net profit margin in 19H1 was 20.
45pct); 19Q2 net margin is 11.
52pct), slightly decreased.
The decline in 19Q2 net interest rate was due to the one-time equity incentive expenses incurred by the company in the single quarter of 19Q2. If the effect of equity incentive expenses is excluded, the company’s 19Q2 net interest rate is 15.
04pct), net margin has increased.
4. The amount of the company’s inventory remains normal, and the turnover days of the accounts receivable are still in a reasonable range. Inventory of the company in 19H1 is 5.
98 million, an increase of 34 in 18H1.
28%, but the ranking in the early 19th year decreased by 4.
We think the increase in the company’s inventories is mainly due to the impact of autumn and winter clothing and new brand stocking.
From the perspective of the single quarter of 19Q2, the company’s inventory has improved, and the proportion of inventory in 19H1 has decreased by 23.18 million yuan in the first quarter of 19Q1. We expect that the company has already begun to control this year’s inventory.
From the perspective of inventory turnover, 19H1 is 0.
45 times (-0.
17 times), the turnover rate decreased slightly; from the perspective of inventory price loss, 19H1 was 823.
670,000 yuan (+40.
41%), the accrual ratio is small, and the inventory structure is multiple and healthy.
The reasons for the rise in the company’s inventory are mainly due to: 1) the growth of direct-operated stores in 2018; direct sales / franchise = 1: 1.
1, compared with the previous 1: 1.
The proportion of 22 has increased. Due to the increase in direct-operated stores and the need to distribute goods, even new products in the current quarter are recorded as inventories; 2) The overall revenue scale is expanded and sales are good, and the purchase and return of franchisees will increase accordingly, leadingThe inventory has increased; 3) The impact of the company’s handling of inventory: the inventory has only entered the Olle channel after one year of seasonal release, and the sales channel has been cleared. Therefore, the way of handling inventory itself makes the company’s inventory turnover slower than other companies.
4) The stocking of the new Venice series also has a certain impact.
We believe that the company’s current inventory age is reasonable, that Olay’s inventory cleaning capacity is strong, and the inventory scale is within a reasonable range, so there is no need to worry too much about inventory risks.
At present, more than 76% of the inventory is one year, and the digestibility of its Olay store inventory is reduced, resulting in better digestion of inventory within two years of the general storage age. Olay products are discounted by 5-6%.After that there is still a lot of gross margin.
Therefore, under the substitution of gross profit space mediation + inventory digestion capacity, Biyinlefen has relatively large inventory impairment pressure and controllable risks.
Accounts receivable: The accounts receivable of the company in 19H1 is 1.
2.3 billion (+110.
12%), an increase of 17.
54%; we believe that the increase in the company’s receivables accounted for the majority of the increase: the company’s channel structure accounted for a large number of department store channels, resulting in a 1-2 month billing period for shopping mall receivables, so the company’s receivables improvedAt the same time, the existence of the account repayment period of the franchisee also has a certain impact on the company’s receivables.
In terms of turnover days, 19H1 is 24.
17 days, an increase of 9 over the same period last year.
24 days, still within a reasonable range.
At present, the company’s accounts receivable within one year accounts for 99.
74%, long-term healthy aging structure.
Operating cash flow: The net operating cash flow of the company in 19H1 was 90.63 million yuan (+121.
24%), cash flow increased; 19Q2 company operating cash flow of -3252.
460,000 yuan, negative cash flow, we believe that it is mainly due to the company’s use of advanced payment in the second quarter; at the same time, the mall repayment requires a period of 1-2 months; other franchisees’ repayment periods exist.negative.
However, these factors are short-term factors, and we expect that the company’s cash flow is healthy and long.
Biyin Lefen is one of the companies with outstanding performance in the mid-term report in the textile and apparel industry. The company has a better track, a distinctive product style, a sports business style, and a differentiated competitive advantage. At the same time, new brands have been developed and the futureWill continue to contribute performance; In addition, the company still has room to open stores, through the continuous contribution of new brands and new channels, the company is committed to maintaining sustained and rapid growth, and continue to firmly recommend.
1) Product and brand side: The company owns the main brand of Bielefing and the new brand Venice Carnival.
The main brand Biyin Lefen locates middle-class and above people, and its products have certain sports business styles. At the same time, it has characteristics in design, fabrics, colors and styles, which are only significantly different from other brands in the market.Think of Biylefen as a superior company on the track.
The new brand Venice Carnival is targeting the blue ocean market of vacation and travel apparel, focusing on creating products such as parent-child wear, couple wear and family wear, which will continue to contribute to the future.
2) Channel side: We believe that the company’s store opening space is around 1500-2000.
We divided 337 prefecture-level administrations into 5 levels, and selected different calculation bases for different levels of cities to make predictions, and obtained that the company still has shop opening space.
Maintain BUY rating, taking into account the one-time incentive costs, we still maintain the 2019-2021 return to mother net profit forecast to 4.
9 trillion; EPS is expected to be 1 in 2019-2021.
23 yuan, given a 30-fold estimate for 2019, corresponding to a target price of 40.
Risk reminder: there is an error in the calculated data, the risk of channel expansion, and the risk of unsalable products.