Core viewpoints
In 2017, the company's operating income and net profit increased by 4.27% and 21.27% respectively compared with the same period last year, and the net profit after deduction increased by 24.68% compared with the same period last year. The effective control of the expense rate during the period is the main reason why the company's profit growth rate is much higher than that of revenue growth in the past 17 years. In 17 years, the company plans to pay a dividend of 3 yuan for every 10 shares. In the first quarter of 18, the company's operating income and net profit increased by 7.38% and 5.41% respectively compared with the same period last year. The company expects changes in net profit from January to June in 18 years to be between 1% and 30%.
In terms of sub-channels, the company's direct marketing, distribution and e-commerce channels increased by 8.91%, 12.45% and 30.84% respectively over the same period last year, with revenue accounting for 49.22%, 18.23% and 31.13%, respectively. In terms of brands, Manifen, Yves, Lanzhuoli and COYEEE accounted for 63.16%, 14.51%, 10.51% and 7.55% of revenue, respectively. In terms of the number of terminals, the adjustment of the company's direct channel has been basically completed in the past 17 years, with a net increase of 81 to 1304 and a net increase of 81 to 1304.
For the whole of 17 years, the company's comprehensive gross profit margin decreased slightly compared with the same period last year (0.44pct), during which the expense rate decreased significantly (3.83pct), of which the sales expense rate decreased significantly (5.00pct), mainly due to the decrease in the number of direct terminals, while the management expense rate increased 1.37pct compared with the same period last year. In the past 17 years, the overall operating quality of the company was sound, and the net cash flow of operating activities increased by 126.75% compared with the same period last year, mainly due to an increase in sales rebates and a decrease in the payment of purchasing inventory. At the end of the year, the company's inventory decreased by 16.81% compared with the beginning of the year, and accounts receivable increased by 2.90% compared with the beginning of the year.
The company has a sound texture and is highly competitive in the underwear industry, but the growth of offline channels is more related to the retail situation of the main channels of shopping malls (the simple expansion of the number of channels has also been completed). In recent years, the whole income mainly comes from the rapid growth of online business. One of the highlights of the future is the possible breakthroughs in men's underwear, new brands and other areas.
Financial forecasts and investment suggestions
According to the annual report and the quarterly report, taking into account the slowdown in the overall growth of the underwear industry and the effect of the company's channel adjustment has not yet been shown, we have reduced the growth rate of the company's direct and franchise income. The company's earnings per share are expected to be 0.66,0.73 and 0.82 yuan respectively from 2018 to 2020 (originally forecast earnings per share of 0.75 yuan and 0.85 yuan respectively in 18-19), with reference to the average valuation of comparable companies. Give the company a valuation of 22 times PE in 2018, corresponding to the target price of 14.52 yuan, downgrade the company's rating to "overweight".
Risk tips: market demand risk, multi-brand, multi-category operation risk, inventory backlog risk, raw material price fluctuation risk