The company announced its annual report in 2019 and the first quarterly report in 2020, showing a 14.4% year-on-year decline in net profit in 2019, which was lower than expected, with a loss of 5.66 million yuan in the first quarter of 2020. 1) the performance has stabilized in 19 years. In 19 years, the operating income was 2.09 billion yuan, an increase of 1.8% over the same period last year, and the net profit of returning home was 210 million yuan, down 14.4% from the same period last year. 2) during the period, expenses increased and profits declined in the fourth quarter. 19Q4 realized 580 million yuan in revenue, down 1% from the same period last year, and its net profit was 35.6 million yuan, down 36.1% from the same period last year. 3) in 19 years, the amount of share repurchase was 100 million yuan, accounting for 48.2% of the net profit. 4) the epidemic affected the passenger flow of offline stores, and the company's performance in the first quarter was under pressure. 20Q1 realized income of 370 million yuan, down 24.6% from the same period last year, while its net profit lost 5.66 million yuan, compared with a profit of 38.35 million yuan in the same period last year.

The gross profit margin has increased significantly, the expense rate has increased, the net profit rate has declined, and the asset quality is relatively healthy. 1) the gross profit margin of 20Q1 increased significantly, while the net profit margin decreased. 20Q1 gross profit margin increased by 6.2pct to 57.9% over the same period last year, mainly due to the substantial increase in e-commerce channel gross profit margin and changes in accounting policies (the new standard income accounting adopts the "total method", and the mall deduction rate fee is included in the sales expense). The sales expense rate rose 11.6pct to 39.7% year-on-year, and the management expense rate (including R & D expenses) rose 3pct to 15.6% year-on-year. Due to the increase in expense rate, the net interest rate turned negative to-1.41%. 2) inventory management continues to improve and asset quality is relatively healthy. 20Q1 inventory fell 15.6 per cent year-on-year to 380 million yuan, accounts receivable fell 28 per cent to 190 million yuan, and net operating cash flow increased 18 per cent to 32.65 million yuan.

Adhere to the multi-brand strategy and integrate high-quality store resources. 1) the main brand KISSCAT is adjusted continuously. In 19 years, the revenue of KISSCAT reached 790 million yuan, down 5.6% from the same period last year. In 19 years, there were 72 to 935 stores. 2) the middle and high-end brands ZsaZsaZsu and tigrisso performed well. In 19 years, the revenue of ZsaZsaZsu reached 180 million yuan, an increase of 16.3% over the same period last year. In 19 years, there were 17 to 129 stores. In 1919, tigrisso achieved 460 million yuan in revenue, down 1.6 percent from the same period last year. In 19 years, there were 16 to 411 stores. 3) KissKitty has been adjusted. In 19 years, the revenue of KissKitty reached 160 million yuan, down 4.1% from the same period last year. In 19 years, 90 to 165 stores were cleared. 4) other brands performed smoothly. In 19 years, the total revenue of other brands reached 120 million yuan, an increase of 0.2% over the same period last year. In 19 years, the number of stores was basically the same.

Offline stores continue to adjust, online business broke out in an all-round way. 1) continuously optimize the channel structure offline and eliminate inefficient stores. The total number of 20Q1 stores was 1655, a net decrease of 76 from the end of 19 (64 direct sales + 12) and a net decrease of 256 compared with the same period last year. 2) develop private domain traffic online to maintain high-speed growth. In 1919, online revenue reached 350 million yuan, an increase of 36.5% over the same period last year. The revenue of e-commerce in 20Q1 was about 95.18 million yuan, an increase of 77.3% over the same period last year.

Kid technology continues to exceed expectations, deeply ploughing the stock of customer demand, and actively develop new business. 1) Kid Technology has continuously overfulfilled its performance commitments.

In 19 years, the income of Kids Technology reached 380 million yuan, an increase of 24.6% over the same period last year, and the net profit returned to its mother was 110 million yuan, an increase of 13.4% over the same period last year, exceeding the performance commitment for the third year in a row. 2) increase in-depth cooperation with customers such as Ali products and XIAOMI Technology to improve the accuracy and conversion efficiency of advertising, and the business of mobile application distribution and programmed promotion has increased significantly. 3) actively develop new business. The company tries to include invigorating business and short video business to bring new increments to the performance.

Capital helps digital transformation and innovates the business model of C2M+MCN store-factory integration. 1) Beifeng's shareholding helps the digital transformation of the industrial chain, enabling the business level to accurately focus and serve consumers. 2) complete the project planning of "Cloud shoes". Guided by C2M and D2C mode, AI data intelligence technology is used to match products and consumers to improve internal efficiency and achieve production and marketing coordination. 3) A full link digital platform is expected to be built at the beginning of the 20th century. The company is committed to promoting the establishment of D2C and C2M industry standards, and laying a solid foundation for building an industrial platform of data interconnection, knowledge sharing, complementary resources and win-win symbiosis.

The company is the leading enterprise in the women's shoe industry, the offline channel continues to optimize the structure, online to maintain a high growth rate, to promote sustained performance growth, to maintain the "overweight" rating. The company's online sales continued to maintain high growth, accounting for a significant increase, but in view of the obvious impact on offline retail in the first quarter, the company lowered its 20-21 profit forecast and added 22-year profit forecast. It is estimated that the net profit of homing in 20-22 years is 160 million yuan, respectively, (the original profit in 20-21 years is 3.2 million yuan, 3.7 billion yuan), corresponding to the PE of 25-20-17, maintaining the overweight rating.