Event description
Jia Linjie (002486) released the semi-annual report for 2015. The main operating results are as follows: during the reporting period, the company's operating income was 324 million yuan, down 30.45% from the same period last year; the net profit belonging to shareholders of listed companies was-31 million yuan, down 194.04% from the same period last year; and basic earnings per share was-0.04 yuan per share, down 193.95% from the same period last year.
Event comment
Decline in demand, reduction in orders, a sharp drop in revenue
In the first half of 2015, the company achieved operating income of 324 million yuan, down 30.45 percent from the same period last year; operating costs of 257 million yuan, down 22.84 percent from the same period last year; and gross profit margin decreased by 7.80 percentage points to 20.92 percent. The revenue scale of all categories of products declined synchronously, with the operating income of fabric products reaching 89 million yuan, down 35.82 percent from the same period last year, and that of clothing reaching 235 million yuan, down 28.17 percent from the same period last year. From a sub-regional point of view, the company's products are mainly exported, and the external economic downturn affects the number of enterprise orders. During the reporting period, the revenue scale of the export market was 306 million yuan, down 31.91% from the same period last year; and the revenue scale of the domestic market was 19 million yuan, down 4.11% from the same period last year. Of this total, the company's operating income in the second quarter was 136 million yuan, down 42.59% from the same period last year.
Project construction cost and private brand investment increased net profit decreased significantly compared with the same period last year.
In the first half of 2015, the company's period expenses were 117 million yuan, an increase of 22.36% over the same period last year, of which sales expenses, management expenses and financial expenses increased by 7.10%, 29.82% and 107.58% respectively compared with the same period last year. The significant increase in financial expenses was mainly affected by the increase in interest on corporate bonds accrued during the reporting period. During the reporting period, the company's net profit was-31 million yuan, a sharp decrease of 194.04% compared with the same period last year. The continuous increase in construction costs and private brand investment in a number of new projects, including production bases in Pakistan and Hubei, are the main factors leading to a significant decline in the company's net profit compared with the same period last year.
With the increase of products and inventory goods, the book value of inventory is higher than that at the beginning of the period, and the proportion of accounts receivable to total assets decreases slightly.
By the end of the reporting period, the company's inventory account value was 191 million yuan, down 7.87% from the same period last year and 10.61% higher than the initial book value. Except that raw materials decreased by 3.70%, products, inventory goods and turnover materials increased by 40.94%, 2.95% and 87.40% respectively compared with the beginning of the period. The book value of accounts receivable is 119 million yuan, accounting for 6.87% of total assets, down from 7.93% at the end of 2014. In terms of the concentration of accounts receivable, the top five balances collected by the defaulting party accounted for 76.94% of the final balance, slightly lower than the level of 79.43% at the end of 2014.
Maintain the "overweight" rating
The company's business layout is mainly outdoor sports high-grade fabric and clothing manufacturing, and its core competitiveness is strengthened by strengthening technical research and development, fine management, and enhancing the resource advantages of the vertical industrial chain. In terms of overseas investment, the company actively allocates and integrates global resources. at present, the first phase of the company's production base in Pakistan is nearing completion and has begun small batch trial production. In addition, through continuous investment in recent years, the company has actively cultivated and built its own brand, and the popularity and influence of its own outdoor sports brand have been improved. At this stage, affected by the downturn in domestic and foreign demand, the demand for international mid-and high-end outdoor textile fabrics and clothing market segments has declined; the increase in construction costs and private brand investment in new projects such as Pakistan and Hubei production bases has also led to a significant decline in business performance. We estimate that the company's EPS in 2015-2016 will be 0.11,0.15 yuan, corresponding to the current stock price estimated at 51 times, 35 times. Maintain the "overweight" rating.