Main points of investment
2016 income / net profit increased by 7.84% and 14.84%. In 2016, the company achieved an income of 353 million yuan, an increase of 7.84%, a net profit of 35.3716 million yuan, and a 14.84% increase of 14.84%. It is proposed to increase 5 shares for every 10 shares and distribute a cash dividend of 0.60 yuan (including tax). The company's 2016Q4 realized revenue / net profit of 1.28 million yuan, with an increase of 5.51% and 32.08% (Q1/Q2/Q3 revenue increased by-8.14%, 16.49% and 18.83%, respectively, and net profit increased by-60.31%, 21.41% and 44.66%, respectively). Q4 received government subsidies and achieved rapid growth in the business of several major customers.
E-commerce channels / independent brands are growing rapidly, and outdoor services are gradually landing. The company's outdoor supplies business income also increased 6% to 340 million yuan, of which online / offline income was 0.63 million yuan and 0.57% respectively, with an increase of 48.87% and 0.57%, respectively. Offline business continues to optimize the store structure, close small stores with poor profitability, open three large flagship stores, and keep the total number of stores unchanged at 36. The total income of own-brand Sanfu / Animaqing / Sanfu children's clothing totaled 14.42 million yuan, an increase of 69%. At the same time, the event business has gradually grown, with nearly 70 events organized throughout the year, with more than 100000 participants; the training business has landed, and the camp business has been opened, with a total income of 13.6084 million yuan for the two major outdoor services, an increase of 90.19%. It is expected that the company's online business will continue to grow at a high speed in 2017, offline channel adjustment is expected to show results, revenue will pick up, and the competition / training business will expand rapidly to achieve performance growth.
The increase in subsidies led to an increase in net interest rates and poor operating performance. During the reporting period, the gross profit margin of the company increased to 46.23%, and the rate of sales expenses decreased by 1.22PCTs to 20.24; the rate of management expenses increased by 4.54PCTs to 11.54%, mainly due to the expansion of the company size and the increase in equity incentives and intermediary fees; the rate of financial expenses increased to 1.56%; in addition, the increase in subsidy income made the non-operating income reach 2.5976 million yuan, an increase of 317.54%. The combination led to an increase in the net interest rate by 0.61PCT to 10.02%. The company's inventory turnover days increased by 14 days to 287 days, and accounts receivable turnover days increased by 19 days to 44 days, mainly due to the rapid growth of major customers / group buying business.
"event + training + retail" to construct the integrated industry ecological circle of outdoor sports service. The company plans to invest 419 million yuan to build an outdoor sports integrated operation center in 7 cities to provide services such as event organization / camp operation / skills training / direct flagship store / experience center to fully meet the needs of outdoor sports enthusiasts. The company has drawn up a strategy to increase fund-raising support, and the increase has been accepted by the CSRC, so it is not affected by the new refinancing rules. According to the "fixed increase Plan (revised version)", the company reduced the number of shares issued to 13 million shares and raised 561 million (of which 359 million was used for operational focus projects). With the smooth progress of the project, the company's business structure was gradually enriched and the brand connotation value was enhanced.
Risk factors. The development of the outdoor industry is slow, the terminal consumption is weak, the contribution of fund-raising projects to sales growth is lower than expected, and the supply of the company's major brands is reduced or stopped.
Profit forecast and valuation. The company's offline business is expected to stabilize and warm up, the effect of adjustment and optimization of outdoor retail channels appears, and gradually integrate the layout of resources, outdoor event operation and camp training to create an outdoor integrated service provider. Considering the moderate growth of outdoor products business and the rapid development of tournament and training business, the company raised its forecast of EPS in 2018 / 2019 to 0.59 / 0.68 / 0.79 in 2019 (the original forecast of 0.46 / 0.51 in EPS in 2017 / 2018) and maintained its "buy" rating.