The company's forecast profit will drop 24.57% from the same period last year, which is basically lower than our expectation for the company to release its 2019 results, KuaiBao, with operating income of 1.423 billion yuan, down 16.97% from the same period last year, and net profit of 275 million yuan, down 24.57% from the same period last year, corresponding to 0.21 yuan per share. Among them, Q1-Q4 revenue year-on-year-15.1%, respectively-7.3%, 14.9%, 14.9%, 36.2%, profit-14.9%, 7.5%, 43.8%, 52.3%, below our expectations, mainly due to a large decline in property sales.
Pay attention to the main points
1. Store property sales are under pressure, and revenue for the whole year fell by 16.97%. In 2019, the company's operating revenue fell 16.97% compared with the same period last year, of which Q4 revenue fell by 36.2%. In terms of business, ① 's annual revenue from property leasing and management was 989 million yuan, down 0.68% from the same period last year, basically the same as the previous year; the sales revenue from ② shops and supporting properties (fashion town projects, etc.) was 275 million yuan, down 21.86% from the same period last year, which had a great impact on performance. In other ③ businesses, health and medical services maintained a high growth rate of 163.71%, hotel service revenue dropped 28.06% compared with the same period last year, and commodity circulation income decreased significantly by 91.73% adjusted by the subsidiary's business scope.
2. Cost control has been strengthened. In 2019, the company strengthened internal cost control. The annual expense rate was 17.7%, which was lower than that of the previous year (0.8ppt). The sales expense rate was 10%, which was lower than that of the previous year (1.3ppt). The management & R & D expense rate was 7.7%, which increased 0.5ppt over the same period last year. Under comprehensive factors, the net interest rate for the whole year was 19.3%.
3. Explore the live broadcast mode and the transformation of business diversification, and pay attention to the new model and the follow-up progress of fashion and health industry. In order to cope with the macroeconomic downturn and weakening demand, the company is actively looking for change: ① is testing the waters of the new business model ecology of "live broadcast + supply". Leather City e-commerce supply live broadcast center was established in October 2019, collecting e-commerce supply, network celebrity live broadcast, supporting photography, anchor training and other one-stop services. ② actively promotes the transformation and upgrading of its business, exploring the development of the fashion industry on the basis of the main leather industry, and expanding its categories to the full range of four seasons clothing; at the same time, the company actively promotes the development of the health industry and has laid out medical institutions such as Haining Picheng Rehabilitation Hospital and Haining second Hospital. Follow up to pay attention to the development of live broadcast business and diversified industries.
Valuation and suggestion
Taking into account the decline in property sales business, we lowered our earnings per share forecast by 19% to 0.21 yuan in 2019. In view of the impact of the epidemic, we lowered the earnings forecast per share by 27% to 0.21 yuan in 2021. The current stock price corresponds to 2019-21 times earnings per share on 18-18-18. Maintain the rating of the outperforming industry, and lower the target price by 15% to 4.63 yuan based on earnings forecasts, which corresponds to a 21% increase in the target price on 22-22-22, 2019-21.
Risk.
The prosperity of leather consumption is declining; the progress of attracting investment in fashion towns is not as expected.
