Main points of investment:
Maintain the overweight rating: considering the impact of the epidemic, the EPS in 2020-2022 will be lowered to 0.41 (- 0.06) / 0.50 (- 0.08) / 0.57 yuan, the comparable industry will be given 27 times PE in 2020, and the target price will be lowered to 11.07 yuan.
The effect of the new retail layout is remarkable, and the Internet business maintains high growth. The company's 2019 revenue was 2.089 billion, up 1.8%, and net profit was 207 million, with a decrease of 14.37%. The performance was in line with expectations.
2020Q1 was affected by the epidemic, with revenue falling by 24.59 per cent to 370 million and net profit loss of 5.66 million. 1) Footwear business: revenue in 2019 was 1.711 billion (yoy-2.2%), and gross profit margin was basically the same as the previous year. Excellent online performance, revenue of 348 million (yoy+36.37%), the company around social e-commerce, early layout of new retail channels, the effect is showing. 2) Internet business: revenue of 379 million yuan (yoy+24.60%) in 2019, fulfilling performance commitments. The decline in gross profit margin (5.15pct) is mainly due to the increase in the proportion of CPA business with low gross margin.
2020Q1 has been greatly affected by the epidemic, and the performance of new online retail channels is outstanding. Affected by the epidemic, Q1 footwear and Internet marketing business decreased by 21.94% and 36.32% in 2020. But e-commerce channel 2020Q1 revenue of 95.17 million, a year-on-year increase of 77.25%. The company has made effective progress by increasing live streaming on major platforms and stores, improving live broadcast quality and outputting more high-quality content.
C2M+ e-commerce new retail two-line layout, leading the new trend of the shoe and clothing industry. In March 2020, the company introduced the North Peak Fund to solve multiple pain points and promote the integrated digital transformation and upgrading of the industrial chain through cloud intelligent technology injection and capital blessing. For online channels, continue to use big data analysis to improve the high marketing accuracy of public and private domain traffic, and achieve the improvement of conversion rate.
Risk tips: epidemic recovery and online sales are not as expected, goodwill impairment risk