Event description

Sinur (002485) publishes the semi-annual report for 2015. The main operating results are as follows: during the reporting period, the company's operating income was 506 million yuan, an increase of 8.27% over the same period last year; the net profit belonging to the shareholders of the listed company was 5 million yuan, turning losses into a win; and basic earnings per share was 0.02 yuan per share, an increase of 133.33% over the same period last year.

Event comment

Product structure adjustment + marketing channel optimization, steady growth of revenue scale

In the first half of 2015, the company achieved operating income of 506 million yuan, an increase of 8.27% over the same period last year. In the case of weak terminal demand, the company adjusts its product structure according to market demand. During the reporting period, revenue from casual suits, trousers and sweaters increased by 22.12%, 30.83% and 11.52% respectively compared with the same period last year. From a sub-regional point of view, the scale of domestic sales remained basically stable (up 0.28% year on year), and overseas sales revenue increased significantly (27.77%) compared with the same period last year. The company adjusted the product structure of online channels, changed the current mode of inventory product sales, and strengthened supply chain cooperation, through small batch production, rapid counter-order and other ways to control the product release rhythm and effectively control inventory; the expansion of new channels has also achieved results, successively stationed in Vipshop Holdings Limited and reached strategic cooperation with SUNING during the reporting period.

Operating costs cause gross profit margin to fall slightly, control fees properly, and net profits turn around smoothly.

In the first half of 2015, the company's operating cost was 351 million yuan, an increase of 9.48% over the same period last year. As the increase in operating costs was greater than that in revenue, gross profit margin decreased slightly by 0.76 percentage points during the reporting period. The company's cost control has achieved remarkable results. The scale of expenses during the period was reduced by 9.67% compared with the same period last year, and the expense rate during the period was reduced by 5.62 percentage points compared with the same period last year. Among them, sales expenses and financial expenses decreased by 13.25% and 23.78% respectively compared with the same period last year. Due to proper control of costs and expenses, the company successfully reversed its net profit in the first half of 2015, turning a profit of 5.2255 million yuan from a loss of 18.779 million yuan in the first half of last year.

The decrease of inventory goods and turnover materials significantly reduced the inventory size, slightly increased the proportion of accounts receivable in total assets, and reduced the concentration.

By the end of the reporting period, the book value of the company's inventory was 338 million yuan, down 6.11% from the same period last year and 4.47% lower than the initial book value. Except for products and commissioned processing materials, which increased by 14.08% and 99.62% respectively over the beginning of the period, raw materials, inventory goods and turnover materials decreased by 0.81%, 14.60% and 39.97%, respectively. At the end of the reporting period, the book value of accounts receivable of the company was 502 million yuan, down 0.90% from the same period last year, and did not increase with the expansion of revenue; accounts receivable accounted for 19.12% of total assets, up slightly from 18.34% at the end of 14. The concentration of accounts receivable is relatively low, and the top five balances collected by the defaulting party account for 10% of the total accounts receivable, which is further lower than the level of 10.98% at the end of 14.

Maintain the "overweight" rating

Under the background of the lower-than-expected recovery of the domestic retail industry and the continuous rise of new business models and new technology applications, the situation of transformation and upgrading of traditional industries is urgent. In this context, as the largest men's formal wear production base in China, the company actively strengthens the construction of marketing channels and integrates direct channels by means of relocation and rental while increasing the training of key franchisees. In terms of brand building, on the one hand, it strengthens the R & D and production of cost-effective brands such as Hinur and Melton, and on the other hand, it launches the high-end Pranio brand to develop customized business to achieve a reasonable layout of high, medium and low products. Recently, the company's controlling shareholder, the bridegroom Sinur Group and its actors transferred the company's shares to Huaxia Life Insurance and natural person Chen Tao respectively. We estimate that the company's EPS in 2015-2016 will be 0.07yuan and 0.05yuan, corresponding to the current stock price estimated at 224,296 times. Maintain the "overweight" rating.