Core ideas:

The company's revenue in the first three quarters was 1.06 billion yuan, an increase of 25.92% over the same period last year, and its net profit was 86.2 million yuan, down 0.18% from the same period last year. Of this total, Q3's revenue in a single quarter was 360 million yuan, up 26.02 percent from the same period last year, and its net profit was 22.01 million yuan, down 6.11 percent from the same period last year. The company expects 17-year homing net profit to grow by 0% Murray 30% compared with the same period last year.

Revenue is growing rapidly, and rising prices of raw materials are a drag on profitability

The company's revenue continues to grow rapidly, on the one hand, because the demand for accessories is driven by the pick-up in downstream clothing sales, and on the other hand, it is affected by the rise in the price of raw materials. The slight decline in profit growth in the first three quarters was mainly due to a drop in gross profit margin to 29.58%, compared with 33.89% in the same period last year.

The decline in gross profit margin is due to a substantial increase in the prices of major raw materials. In addition, the increase in intermediary fees and financial costs brought about by the chain of M & A prices also has a certain impact on profits.

The price chain is expected to grow rapidly, and the consolidated table in the fourth quarter will increase the company's profits.

The future performance of price chain is expected to continue to grow rapidly, mainly because of the broad space for cross-border export e-commerce industry, the potential for the development of own-brand e-commerce, and the implementation of high-quality strategy in price chain, as the representative of own-brand cross-border export e-commerce, it is currently in the stage of rapid development. The company has completed the acquisition price chain 65% of the equity, according to the performance commitment, the annual net profit of the price chain for 17-19 years is not less than 100 million yuan, 160 million yuan, 250 million yuan, the company expects that the profit of the four seasons price chain will increase by about 40 million yuan.

Proposed rights issue to raise funds to promote the long-term development of the company

The company plans to raise 1.59 billion yuan for every 10 shares, and the full subscription by the controlling shareholders shows confidence in development.

In the rights issue, 810 million yuan is used to repay bank loans, 220 million yuan is used to pay the final payment of the acquisition, and 560 million yuan is used to supplement working capital, which is conducive to improving the financial situation and providing support for the company's business development.

The results for 17-19 years are expected to be 0.39 yuan per share, 0.58 yuan per share and 0.81 yuan per share, respectively, corresponding to 41x and 28x PE in 18 years. Maintain the company's "cautiously overweight" rating.

Risk hint

Exchange rate fluctuation risk; clothing consumption decline risk; fierce competition risk of cross-border e-commerce services