Valuation

It is estimated that the profits in 2013 will not be less than 1.42 million yuan for the people. Calculated by this number, the forward price-to-earnings ratio for the 2013 financial year is 8.0 times 11.6 times. As the trading of the only fellow doctor frog (1698.HK) listed in Hong Kong has been suspended for a long time, we believe that non-cooperation is a competition. As far as the industry is concerned, thanks to a number of policies, including "single second children", China's children's products market will become one of the high growth industries in the future. The reason for the competition is that it is still one of the forerunners, and its brand awareness and market share are higher than those of its counterparts. however, it is expected that the competition in the future will become more intense. According to the past data, it can be seen that the profitability of the collection is stable, and the interest rate is more than 20%. It is believed that it has something to do with the marketing model of the distributor, so the monitoring and control of the sub-contractor is very important for the future development. On the whole, I believe that we are in a high-growth industry, but there are also a lot of uncertainties. Due to the low growth rate relative to its valuation, it is recommended that investors should make small comments on long-term stocks.

Negative factor

(1) almost all the products of the collection are sold under the "child child" brand, and brand awareness is related to it. Failure to maintain or enhance brand awareness may adversely affect the future; (2) most of the products are sold to the most consumer by third-party subcontractors and their sub-subcontractors, and the control over such distributors and sub-distributors is limited; (3) the sales capacity of retail stores is limited and may not be able to effectively handle the sales associated with customized retail stores. (4) the market may contract out the production of some products, and the product supply may be poor; (5) the market may encounter difficulties in expanding to new markets, launching new products, or integrating new brands with the industry; and (6) the increase in raw materials and labor costs may adversely affect profitability.