From January to September, income increased by 183%, net profit increased by 8%, and the expansion of tourism business led to income growth.
From January to September 2019, the company achieved revenue of 2.804 billion yuan, an increase of 182.67%, a net profit of 85.7523 million yuan, an increase of 7.99%, a deduction of non-net profit of 35.3907 million yuan, and an increase of 213.25%. The growth rate of net profit is lower than that of income, mainly due to the decrease of gross profit margin and non-operating income, and the decrease of non-recurrent income due to the impact of income tax.
From a quarterly point of view, 2018Q1-19Q3's revenue increased by-15.72%, 37.49%, 212.88%, 223.37%, 424.50%, 274.93% and 83.15%, while the net return to mother increased by 28.88%, turned losses into profits, 114.39%, 36.25%, 121.05%, and turned losses into profits, 1.05%. 2019Q3 benefited from the rapid growth of the company's clothing group purchase orders and tourism business, and the company's revenue maintained rapid growth compared with the same period last year, while the growth rate of net profit was lower than that of income, mainly due to the increase in financial expenses rate and 0.72PCT, the decline in non-operating income by 3.51%, and the increase in income tax compared with the same period last year.
The increase in the proportion of tourism revenue leads to a decline in gross profit margin and expense rate compared with the same period last year.
From January to September 2019, the company's gross profit margin also decreased to 13.33%, mainly due to the increase in the share of low gross margin tourism revenue. Quarterly, 2018Q1-19Q3 gross profit margin is 19.54% (+ 1.37PCT), 22.20% (- 0.41PCT), 13.18% (- 13.30PCT), 17.05% (- 10.10PCT), 10.68% (- 8.86PCT), 13.79% (- 8.41PCT), 15.01% (+ 1.83PCT), 19Q3 gross profit margin increased year-on-year.
During the period from January to September 2019, the expense rate decreased from 2.87PCT to 8.56%, of which the sales expense rate also decreased from 3.49PCT to 5.66%, mainly due to the low sales expense rate and the increase in the proportion of income in tourism business. The management expense rate also dropped to 2.48%, mainly because the company controlled the increase of expenses such as labor compensation. The financial expense rate also increased by 0.98PCT to 0.42%, mainly due to the increase in financial assistance and interest expenses to the controlling shareholders.
Optimize and integrate the clothing business, continue to expand the tourism business, culture, travel, small towns and other operations.
We believe that: 1) in terms of clothing business, the company will focus on brand operation and management, develop Planio premium customized brand on the basis of traditional Sinur brand, extend Volkswagen fast fashion brand, integrate and optimize sales channels, and increase the expansion of group buying market to drive the steady growth of clothing revenue. 2) in terms of tourism business, the company deepened the operation of culture and tourism towns, created a three-dimensional tourism service system of "food, accommodation, transportation, shopping and entertainment", and launched a tourism B2B platform in 2018 to meet the purchasing and sales needs of the B end of the tourism industry. promote the rapid growth of tourism business income 3) in April 2019, the company announced that no more than 28 shops and real estate would be sold and leased to enhance profitability. 24 shops had been leased from January to September 2019, with a confirmed income of 10.6918 million yuan. 4) from November 16, 2018 to November 7, 2019, the company's controlling shareholder Cedar Wen Tou and the people who acted in concert increased their holdings by 21.7599 million shares, accounting for 4.00% of the total share capital, with an increase of 169 million yuan, demonstrating the controller's confidence in the long-term development of the company. The duration of this plan is November 15, 2019.
The company continues to expand its cultural tourism business, and its performance growth is relatively stable. We maintain an EPS forecast of 0.26 yuan 0.29 yuan in 2019-20 and a forecast EPS of 0.32 yuan in 2021. The current stock price corresponds to 25 times PE in 2019, maintaining a "neutral" rating.
Risk tips: clothing consumption continues to be weak, the development of tourist towns is not as expected, clothing inventory is overstocked and so on.
