Affected by the epidemic, 20Q1 income dropped 51%, return to the mother net profit loss 2020Q1 realized income of 49 million yuan, the same drop of 51.33%, return to the mother net profit of-7.3817 million yuan, from profit to loss, deducting non-net profit of-7.1523 million yuan, from profit to loss, EPS is-0.02 yuan. The company's business is mainly for fur OEM, fur brand wholesale and retail and Voss town shop transfer and rental. Affected by the epidemic, 20Q1 stopped production after the Spring Festival, the suspension time increased compared with the same period last year, product sales declined, and store transfer and rental income decreased, resulting in a large decline in revenue, a year-on-year decline in gross profit margin and an increase in the rate of sales and management expenses led to net profit loss.
From a quarterly point of view, 2019Q1-2020Q1's income increased by-5.82%, 27.31%,-41.43%, 6.69%, and-51.33%, while its mother's net profit increased by 2.65%, 2.13%,-47.53% and 2.23%, respectively. Affected by the recognition time of the company's transfer store revenue, revenue and profit fluctuated greatly in each quarter of 2019, and the 2020Q1 pneumonia epidemic led to a month-on-month decline in the company's performance growth rate.
20Q1 companies affected by the epidemic have lower gross profit margin and higher expense rate.
2020Q1's gross profit margin also fell by 3.41PCT to 27.63%, mainly due to a large year-on-year decline in company revenue and relatively rigid labor and other costs. From a quarterly point of view, 19Q1-20Q1 gross profit margin is 31.04% (- 2.01PCT), 26.86% (+ 1.29PCT), 26.43% (+ 9.37PCT), 22.11% (- 6.10PCT), 27.63% (- 3.41PCT), respectively. The company's quarterly gross profit margin fluctuates greatly affected by the recognition time of transfer store revenue.
During the period of 2020Q1, the expense rate increased by 9.43PCT to 40.99%, mainly due to the decrease in the scale of income affected by the pneumonia epidemic, and the rigidity of some expenses, in which the rates of sales, management and R & D expenses increased to 17.06%, 23.65% and 1.73%, respectively, while the financial expense rate also decreased to 0.28%, mainly due to the increase in exchange rate gains caused by exchange rate changes.
Government paid to recover the company's real estate, controlling shareholders to provide loan support we think: 1) affected by the COVID-19 epidemic in the short term, downstream fur clothing sales and exports are relatively weak, it is expected that the company's main fur income growth pressure in 2020. Fur consumption is expected to recover after 2021, the company strengthens its operations in the small town of Woss, and revenue is expected to resume growth. 2) affected by the epidemic in 2020, the company's gross profit margin is expected to decline and the expense rate is expected to increase. In March 2020, the company announced that the local government intends to recover the real estate held by the company with an estimated value of 79.0093 million yuan, which will increase the profit level. The company is expected to resume normal operations in 2021, with a year-on-year decline in net profit affected by a high base. 3) on March 10, 2020, he Guoying, the controlling shareholder of the company, voluntarily provided the company with a loan of no more than 48 million yuan, valid for 12 months, to support the company's business operation and development according to the interest of bank loans in the same period.
Taking into account the government's resumption of the company's real estate to increase profits and the impact of COVID-19 's epidemic situation, we have raised the forecast of EPS in 2020 to 0.17 yuan, lowered the forecast of EPS to 0.04 yuan in 2021 (the original value is 0.06 yuan), and predicted that EPS will be 0.04 yuan in 2022. The current stock price corresponds to 27 times PE in 20 years, maintaining a "neutral" rating.
Risk tips: COVID-19 epidemic impact more than expected, overseas demand is weak, domestic consumer market is depressed, RMB exchange rate fluctuations and so on.