Relying on an Internet platform to build a single-brand, multi-category operation model Since its establishment, the company has always focused on clothing planning and design, supply chain management and sales business, comprehensively covering all categories of products in the clothing field, adhering to the “Rongmei RUMERE” single-brand multi-category operation model, relying on e-commerce platforms, with independent planning and design capabilities and a rapidly responsive product supply chain, it responds quickly to customer needs with the support of information systems and has gradually formed a brand moat.
The scale of revenue increased steadily, with 21Q1-3 net profit of 110 million, up 34.8% from the same period.
In 2017-20, the company's revenue increased from 585 million to 851 million yuan, and 21Q1-3 revenue was 548 million yuan (+12.5%). Revenue was clearly influenced seasonally by weather and holidays. Net profit attributable to mothers increased from 70 million yuan to 162 million yuan in 2017-2020, and 21Q1-3 reached 114 million yuan (+34.8%). The gross margin of the 21Q1-3 company was 47.8% (+2.7pct), and the net profit margin was 20.8% (+3.4pct).
The company is a good example of the deep integration of traditional industries with new technologies, new business formats, and new models. It operates through online channels and has the advantage of a business model. The company relies on online channels and adopts a vertical sales model, eliminating intermediate links, greatly reducing product circulation costs and information communication costs, so that customers can purchase high-quality products at relatively low prices. At the same time, relying on the Internet platform and the information management system, the company can fully obtain feedback from consumers and make targeted adjustments to its own business strategy and product portfolio in a timely manner.
The company has accumulated rich experience and operational advantages in the e-commerce market, and has established good cooperative relationships with major e-commerce platforms.
Control supply chain management to form a healthy closed loop of business. Through long-term cooperation and run-in with suppliers, the company has built a high-quality supplier network covering various clothing categories with a certain production scale and process level. At the same time, the company's own Mikura fashion factory provides the company with product supply flexibility with its own small-batch rapid production capacity.
The company's small-batch, customized and high-frequency order requirements can be met in the fastest time. The company achieved a new frequency of three times a week, and at the same time cultivated the consumer habit of visiting stores every day.
The opening up of the company's internal information management system ensures that different consumer responses such as quantity and satisfaction of each garment can be digitized and fed back to the company in a timely manner. The company promptly understands and satisfies consumer needs, and makes quick adjustments based on this, such as adding orders or launching similar popular products.
Deeply integrated with information technology to achieve full coverage of business processes. The company has established a series of information management systems in line with the operation of the online apparel retail industry. The company has launched a new product arrangement system, supplier settlement management system, etc., and has basically built an information management system covering the entire business process, achieving full coverage of the information management system from planning and design to production management, and digitizing sales side information from order management to delivery management, forming the foundation for the company's high-frequency anti-business characteristics of new and small orders.
First coverage, giving a rating for increasing holdings.
The company carries out clothing planning and design, supply chain management and sales business based on online stores. Relying on e-commerce platforms, with product design and supply chain management as its core competitiveness, the company has established a leading position in the industry by providing customers with high-quality, cost-effective clothing and accessories products through a new retail model with the support of an information management system.
We expect the company's revenue for 2021-2023 to be 1.07 billion, 1.36 billion, and 1.74 billion, respectively, and net profit of 210 million, 280 million, and 360 million yuan respectively. The corresponding EPS will be 0.9, 1.2, and 1.6 yuan respectively, and the corresponding PE will be 28, 21, and 17 times, respectively. The company was given a reasonable PE of 32.47 times in 2021, with a corresponding stock price of 30.2 yuan/share, giving it an increase in holdings rating.
Risk warning: Risks such as failure to accurately grasp changes in popular trends; high concentration of sales channels; intellectual property disputes; outsourced production management; falling inventory prices; new buyers, number of purchases, and average unit price growth falling short of expectations; short-term stock price fluctuations.
