From January to September, the monthly income increased by 80.46%, and the net profit increased by 256.83%. The expansion of tourism business led to a substantial increase in performance.
From January to September 2018, the company achieved revenue of 992 million yuan, an increase of 80.46%, a net profit of 79.4052 million yuan, an increase of 256.83%, a deduction of non-net profit of 11.2979 million yuan, an increase of 222.19%, and an EPS of 0.15 yuan. The growth rate of net profit is higher than that of income, mainly due to the decrease in expense rate and the increase in non-operating income, and the higher than deduction of non-net profit is mainly due to the substantial increase in government subsidies included in the current profit and loss, resulting in an increase of 263.25% in non-recurrent profit and loss.
The single-quarter revenue of 17Q1-18Q3 increased by-9.45%, 18.62%, 15.56%, 26.21%,-15.72%, 37.49% and 212.88%, respectively, and the mother net profit changed from profit to loss, from profit to loss, from loss to profit, from loss to profit, + 28.88%, from loss to profit, + 114.39%.
The company's original business is mainly clothing, in June 2017, the controlling shareholder was changed to Cedar Travel, and in March 2018, it began to expand its tourism business by means of acquisition and investment. 2018H1's clothing, tourism and other business income was 305 million yuan, 73.5684 million yuan and 10.0534 million yuan respectively, accounting for 78.50%, 18.91% and 2.58%, respectively.
Affected by the relatively depressed clothing consumption in the first three quarters of 2018, clothing business revenue declined compared with the same period last year, while 2018H1 clothing revenue also fell by 12.91% 18Q3. The rapid expansion of 18Q2-Q3 tourism business has led to a substantial increase in overall income. 2018Q1 management expense rate decreased 3.63PCT, asset impairment loss decreased resulting in loss reduction, Q2-Q3 new tourism business income, expense rate decreased, driving the company's profits higher than the same period last year.
New tourism business, resulting in a significant decline in gross profit margin and expense rate
The gross profit margin of 18 years from January to September was reduced by 6.14PCT to 16.28%, mainly due to the increase in the cost of carrying forward from the new tourism business compared with the same period last year, and the gross profit margin of the clothing business remained basically stable. The single-quarter gross profit margin of 17Q1-18Q3 is 18.17% (- 9.92PCT), 22.60% (+ 6.33PCT), 26.47% (+ 9.64PCT), 27.15% (+ 10.95PCT), 19.54% (+ 1.37PCT), 22.20% (- 0.41PCT) and 13.18% (- 13.30PCT). The increase in carry-over costs of 18Q3's new tourism business is a drag on gross profit margin performance.
During the period from January to September in 18 years, the expense rate decreased from 11.97PCT to 11.42%, of which the sales expense rate also decreased to 9.15%, mainly due to the company closing more stores and the lower sales expense rate of new tourism business income; the management expense rate also dropped to 2.83%, mainly because the company adjusted its development strategy, stripped off some of its clothing production, design and other assets, and reduced costs. The financial expense rate also decreased by 1.36PCT to-0.56%, mainly due to the increase in interest income and the decrease in interest expenditure.
Adjust and integrate the clothing business and continue to promote customization and group purchase business
After the listing, the company mainly focuses on the clothing business. After 2014, it has entered the adjustment with the industry, the growth rate of clothing revenue has slowed down, and the revenue in 2012-16 has declined compared with the same period last year. The company integrates sales channels and sells and leases shops to improve profitability. Clothing demand picked up somewhat in 2017, the company's channel structure continued to optimize, and vigorously expand the group purchase business, driving income growth.
After the change of the company's controlling shareholder, it will steadily develop the traditional clothing business, improve profitability by adjusting the business model, and comprehensively promote customization and group purchase business. 1) in October 2017, the company announced that the assets and liabilities related to clothing production would be transferred to Zhucheng Pulanio Men's Wear Co., Ltd., a wholly-owned subsidiary to be invested, so as to optimize the allocation of resources and reduce costs and costs. 2) the company retains part of the sales channels, upgrades the store image, strengthens the fine management of the marketing terminal, sells and leases some stores to enhance profitability, 24 shops have been rented out in 2017, and the confirmed income is 12.88 million yuan. Sell one store, the transaction price is 57.38 million yuan; in April 2018, the company announced that it will sell no more than 29 purchased shops / real estate to enhance profitability. 3) the company continues to promote full-category personalized customization business, achieve full-category and multi-brand customized sales of "Sinur + Planio" in more stores, and vigorously expand the group purchase market.
The transfer of control shares is involved in the culture and tourism industry, the layout of the literature and tourism town, and the promotion of the online platform Songlu.
On June 13, 2017, the company announced that Guangzhou Cedar Cultural Tourism Investment Co., Ltd. signed an agreement with six shareholders including Sinur Group to purchase its 200 million Sinur shares (accounting for 62.51% of the total share capital). After the change of the controlling shareholder, the company strengthens the tourism business through a number of investment mergers and acquisitions.
On March 12, 2018, the company announced that it had invested 50 million yuan and 90 million yuan respectively to acquire 100% equity of Renhua Real Estate Co., Ltd., Shangri-La and 90% equity of Guangzhou Tiannanwen Brigade, and to develop the projects of Dukezong Wenlu Town in Yunnan Province and Xi'an Zhiyang Wenlu Town respectively. On March 22, 2018, the company acquired a 100% stake in Beijing Zhongfu Kanghua Scenic spot Tourism Development Co., Ltd. and two subordinate project companies to develop its land and tourism project in Xitang Town, Zhejiang Province. On April 27, 2018, the company announced the establishment of three wholly-owned subsidiaries to engage in cultural tourism project development and performance projects in Guilin, Qiandao Lake and Zhoushan area. The company cooperates with artists, directors, planners and actors in the industry to create cultural and performing works to enrich the content of the town and enhance its cultural value.
In June 2018, the company launched Songlu.com, a B2B platform, to provide dealmaking, enterprise promotion, account trading and other services by means of the Internet and big data, to meet the transaction needs of B-end suppliers, distributors and retailers of tourism, and to solve the pain points such as information asymmetry, cost and account duration in B2B transactions in the tourism industry. At present, the pine travel network mainly serves Guangdong, Shandong, East China and other regions, and gradually expands to areas rich in tourism resources such as Sichuan and Chongqing, Hunan and Guizhou.
Terminate the acquisition of Lijiang tourism assets and sign the entrustment management agreement for joint operation
On June 6, 2018, the company announced that it planned a major asset restructuring to issue shares to the counterparty Xingxing Media to acquire 100% equity interests in Lijiang Yulong Garden Investment Co., Ltd. and Lijiang Huilong Tourism Development Co., Ltd. the transaction price is tentatively set at 806 million yuan. The company and the counterparty are affiliated legal persons under the control of the same actual controller. The main product of the target company is Dayanhua Lane in the ancient city of Lijiang, which is one of the areas with high tourist arrival rate. On November 13, 2018, the company announced that it decided to terminate the major asset restructuring and resume trading due to the impact of domestic and foreign macroeconomic environment and capital market fluctuations.
On November 13, 2018, the company announced that it signed the "Da Yan Hua Xiang Project entrustment Management Agreement" with Lijiang Yulong and Lijiang Huilong to carry out the operation and management of the Da Yan Hua Xiang project. including business plan determination, project upgrading and optimization, shop investment, program arrangement, promotion plan, performing arts ticket pricing and other agenda business items, the management period is from January 1, 2019 to December 31, 2021. The company will charge Lijiang Yulong and Lijiang Huilong a basic management fee of 5 million yuan per year, and charge floating management fees according to the corresponding proportion of annual operating income. After signing the entrusted operation, it is expected to enhance the profitability of the company's tourism business and improve the layout of the cultural and tourism industry chain.
The 18-year net profit is expected to increase by 173% to 309%, and the new tourism business will lead to performance growth.
The company expects to return home net profit of 1.00 to 15000 yuan in 2018, with an increase of 172.89% and 309.33%, mainly due to the company's clothing business actively adjusting its strategy and increasing the expansion of group purchase business. cultural tourism business continues to promote offline cultural tourism town project, online platform Songlu net develops rapidly and receives government subsidy funds.
We believe that: 1) clothing business, due to the relatively weak clothing consumption in 2018, revenue has declined; in the future, the company will comprehensively optimize the store structure and increase the expansion of group buying market and customized business, which is expected to lead to revenue growth. The company will transfer some of its R & D, design and production assets to reduce costs and costs and enhance profitability. 2) in terms of cultural tourism, the company began to get involved in related business through investment and acquisition in 2018, driving overall revenue growth; the company integrates tourism channels and resources offline with the cultural travel town as the carrier. In the future, more tourism towns will be put into operation, revenue is expected to maintain steady growth, and profitability is expected to improve.
Due to the increase in the company's profitability due to the new cultural tourism business after the change of controlling shareholders, we have raised the forecast of EPS for 2018-19 to 0.22 EPS 0.26 yuan, and the forecast 2020 PE to 0.29 yuan, corresponding to 58 times PE in 2018. Although the company's profitability has recovered somewhat, considering the downside of the market valuation center and the 14.75% decline in the Shanghai Composite Index after the suspension, the company's valuation is relatively high and maintains a "neutral" rating.
Risk tips: clothing consumption continues to be weak, tourism town development is not as expected, pine travel network development is not as expected, and so on.
