This report is read as follows:
The company actively expands its service brands, including Q3 contracts with Cha, Junlebao, Zhengguanzhuang and other brands; the upward flow cost and independent brand incubation investment lead to profit pressure and look forward to the inflection point of profit margin.
Main points of investment:
Investment suggestion: the company will continue to invest in incubating its own brands, lowering its EPS forecast for 2021-2023 to 0.49 (- 0.35) / 0.68 (- 0.40) / 0.87 (- 0.46) yuan, with reference to comparable company valuation, lowering its target price to 27.2 yuan to maintain its overweight rating.
The rate of sales expenses rose and the performance was slightly lower than expected. In the first three quarters of 2021, the company realized revenue, homing and deducting non-net profit of 8.84,0.46 and 36 million, which was + 13.08%,-28.26% and-39.75% respectively compared with the same period last year. Q3 alone realized revenue, homing and deducting non-net profit of 2.86,0.07 and 6 million, year-on-year + 25.93%,-70.62% and-74.59%. Retail business is expected to perform well in revenue.
Q3 gross profit margin slightly decreased 1.07pct to 36.76% compared with the same period last year; online traffic costs and private brand investment continue to drive up sales fees, and Q3 sales expense rate is 27.14%, year-on-year + 7.98pct.
Due to continuous cost investment, the net interest rate in the first three quarters was year-on-year-3.03pct to 5.24%-7.59pct to 2.34% compared with the same period last year.
The contracted brand continues to expand, covering a wide range of fast consumer products. The company Q3 has signed contracts with a number of brands, including well-known brands such as Food, Junlebao and Zhengguanzhuang, a time-honored brand in South Korea. At present, it has covered maternal and child health products, cosmetic care, home cleaning, food and beverages and other fast consumer products.
Private brand blossoms are still a long-term focus. The growth trend of the exquisite clothing care brand incubated by the company is good. At present, the sales of the whole network have reached nearly 60 million, and the cumulative sales of popular underwear lotion have exceeded 1 million bottles. At the same time, with the help of incubating its own brand, the company continues to achieve innovation and anti-generation operation in marketing and digital marketing, and is expected to achieve the steady development of both generation operation and independent brand business in the long run.
Risk hint: market competition intensifies, marketing investment increases, and new brands are not as good as expected.