Revenue decreased by 15.41%, operating profit increased by 40.67%, net profit increased by 8.21% from January to September in 16 years, the company realized income of 341 million yuan, down 15.41% from the same period last year; operating profit was 7.06 million yuan, up 40.67% from the same period last year; and the net profit of returning to the mother was 8.63 million yuan, an increase of 8.21% EPS 0.02 yuan. The decline in income was mainly affected by sluggish demand in overseas and domestic markets; operating profit increased by 40.67% year-on-year on the basis of increased 5.84PCT in expense rate, mainly contributed to the increase in gross profit margin 6.61PCT; non-net profit increased by 59.00% year-on-year, which was higher than net profit mainly due to a decrease in non-operating income of 1.86 million yuan due to the reduction of government subsidies.
On a quarterly basis, Q3 revenue fell 16.18% compared with the same period last year, and the net profit was-110000 yuan (a substantial reduction in losses compared with the same period last year-2.13 million yuan), an increase of 95.02% over the same period last year. 15Q1-16Q2 income is-12.89%,-50.78%,-29.99%,-28.28%,-16.16%,-13.38% respectively, and net profit is-39.96%,-102.44%,-109.17%,-62.40%,-26.18%, + 221.20%, respectively. The improvement in 16Q3 net profit mainly benefited from the increase in gross profit margin.
Benefit from the increase in gross profit margin of low-cost raw materials, which fluctuated greatly in a single quarter, and the gross profit margin increased by 6.61PCT to 32.44% from January to September in 16 years, mainly due to the purchase of raw materials at lower prices and lower costs in the previous two years.
The gross profit margin of 15Q1-16Q3 is 34.77% (- 0.69PCT), 24.65% (- 2.53PCT), 19.29% (- 10.54PCT), 33.76% (+ 0.27PCT), 45.74% (+ 10.97PCT), 23.82% (- 0.83PCT) and 27.65% (+ 8.35PCT) respectively. The gross profit margin of 16Q1 fluctuates greatly in a single quarter, and the increase in gross profit margin of Q1 is mainly due to the contribution of Q1 domestic sales business with higher gross profit margin in the peak season, while the slight decline in Q2 gross profit margin is mainly due to the relatively high export share and low gross profit margin in that quarter. The increase in Q3 gross profit margin is mainly caused by the transfer of some management rights, rental income and other businesses with higher gross profit margin.
Expense rate: during the period from January to September in 16 years, the expense rate increased by 5.84PCT to 29.04%, of which the sales expense rate increased by 2.62PCT to 10.53%, the management expense rate increased by 0.89PCT to 12.77%, and the financial expense rate increased by 2.33PCT to 5.74%, mainly due to the increase of corporate borrowing and interest expenses.
During the single quarter of 16Q3, the expense rate was 26.77% (+ 7.45PCT), the sales expense rate was 9.34% (+ 3.44PCT), the administrative expense rate was 10.96% (- 3.37PCT), and the financial expense rate was 6.47% (+ 7.38PCT).
Consolidate the leading advantage and extend the main industry of intensive fur cultivation to the upstream and downstream.
As a leader in the fur industry, the company has eight mink farms in Denmark and Latvia, Suning International Fur Trading Center (and fur raw material trading market), Wass Fur City (Phase I and II), and a joint venture to establish Voss Yiyou Internet Financial Services Company. it has formed a complete industrial chain from mink breeding, raw fur trading, fur product research and development, production, design to sales and financing. At the same time, the company actively consolidates the leading advantages, deeply ploughs the main fur industry, and strengthens all links of the industrial chain:
1) fixed increase intensive tillage production and processing link: on March 29, 2016, a fixed increase plan was issued, and 6.2 was adjusted to raise not less than 14.31 yuan per share and not more than 600 million yuan for the layout of cleaner production platform and storage base construction projects. integrate the cleaner production needs of small and medium-sized fur processing enterprises and give full play to their leading advantages. at present, Dingzeng has been approved by the CSRC in August and is expected to be completed in the near future. With the availability of funds, it is expected to speed up the landing of the project.
2) extension of Internet financial services: in the first half of 15 years, the company funded the establishment of Voss Yiyou Internet Financial Services Company (holding 60%), which is mainly engaged in fur pledge financing business. at present, it is still in the early stage of business development, and there is expected to be room for expansion in consumer finance and cooperation with auction houses in the future.
The second main business social e-commerce business is progressing smoothly, participation in micro-selling and future moments respectively layout the cash end and the flow end, the initial cooperation on the basis of the fur business, the company actively expand the second main business of social e-commerce, is still in the cultivation stage. The company acquired a 30% stake in social ecommerce Youshe Technology (the main operator of "micro-sale") in May 2015, and reached a strategic cooperation with Weibo Corp in July. The main operation mode of micro-sale is B2C2c, which provides wholesale and distribution services for goods as a mobile phone APP, that is, merchants put the goods in the wholesale market in the micro-sale platform, where anyone can set up shop on the micro-sale, purchase goods from the platform to their own stores, and then share them to Weibo Corp for sales, and receive commission after the transaction is successful. Micro-sale provides rich supply chain resources for Weibo Corp's talent / online celebrities, which helps to realize the realization of huge amount of social platform traffic and has a broad prospect. Micro-selling is currently in a period of rapid development. Youshe Technology contributed an investment income of-400000 in 2015 and is expected to make a profit this year.
In August 2016, the company acquired a 10% stake in the beauty online celebrity brokerage company in the future, focusing on the cosmetic online celebrity economic business, which has a strong synergistic effect with micro-selling. in the future, online celebrities can become the C of micro-sales and increase trading volume, while micro-selling can provide goods for the influence of online celebrities.
The company's medium-and long-term strategic positioning fur main business and micro-selling surrounding dual main business development, the company has invested in micro-selling and the future moment, but the investment scale is not large, we judge that the future company still has M & An expectations in the field of social e-commerce.
Subject to weak foreign demand, performance continues to be under pressure, "industrial chain deep ploughing + second main business social e-commerce" to open up new development space the company expects 16 years of return net profit growth of-30% to 20% year-on-year. We believe that: 1) the main industry is still under great pressure under the influence of overseas demand, as the Russian economy stabilizes and recovers, and the demand for fur products is more rigid, the company as an industry leader is expected to benefit first. at present, raw material prices have rebounded and are expected to be gradually transmitted to the product end; in addition, the company has hoarded a large number of low-cost fur raw materials in 14 or 15 years, which is expected to increase gross profit margin and help improve performance. 2) the company continues to plough deeply on the basis of the whole industry chain, steadily increasing the construction of cleaner production platform and developing financing business through Voss Yiyou, and is expected to take advantage of the leading advantage to develop new development space; 3) in terms of social e-commerce, the company pays attention to the investment in the flow end and micro-selling has cooperated with Weibo Corp, while taking a stake in the future moment of online celebrity companies and enjoying the huge flow realization opportunities brought by the potential online celebrity economy. There are still expectations of mergers and acquisitions in related fields in the future. 4) in terms of performance, Phase I and Phase II of Qiupi City will begin to contribute rent or deduction income in 16 years, while Youshe Technology is expected to make a profit in 16 years and will gradually contribute to its performance; 5) the fixed increase of no more than 600 million yuan has been approved by the Securities Regulatory Commission in August and issued a reserve price of 14.31 yuan per share. Major shareholders promise to subscribe for 60 million yuan to show confidence in future development.
We are optimistic that the company's main business will achieve restorative growth in the context of overseas market recovery and low cost lock-in, as well as the extension growth opportunities brought by the deep ploughing of the industrial chain, as well as the broad prospects for the cultivation of the second main business of social e-commerce. The short-term recovery of overseas export demand still takes time and affects the revenue side; the increase in gross profit margin makes a positive contribution to the growth of net profit. The fourth quarter is the peak season for domestic sales, and it is expected to continue to promote the increase in gross profit margin as the company's domestic business share increases. To sum up, consider slightly lowering the EPS for 16-18 years to 0.06,0.12,0.22 yuan, the short-term valuation is on the high side, but long-term optimistic about the leading benefits brought by the recovery of the fur business and social e-commerce business has more room for development, maintain the "overweight" rating.
Risk hint: overseas demand is weak, domestic demand is weak, and social e-commerce business is not as good as expected.