Long-term optimistic about the company's digital upgrade to improve efficiency, maintain the "buy" rating
In 2019, the company's revenue was 2.09 billion yuan, + 1.8% compared with the same period last year, which was lower than our previous forecast of + 3.1%. The net profit of returning to the mother was 210 million yuan,-14.4% compared with the same period last year, mainly due to the expansion of digital marketing business, the decline in interest rates and the reduction of government subsidies compared with the same period last year. 2020Q1's revenue was 370 million yuan,-24.6% year-on-year, and a net loss of 5.663 million yuan, compared with a profit of 38.352 million yuan in the same period last year, mainly due to the influence of COVID-19 's epidemic. We believe that with the adjustment of offline channels and the pick-up of terminal demand, offline store revenue and profits are expected to return to the growth channel, and digital marketing business is also expected to rebound in 2020Q2; in the long run, the investment of Beifeng Capital will accelerate the company's digital upgrading and build high supply chain efficiency barriers. We expect the company's 2020E-2022E EPS to be 45 yuan / 0.59 yuan / 0.70 yuan, maintaining a "buy" rating.
Footwear and apparel: 2019 omni-channel operational efficiency improved, the proportion of online revenue increased to 20.4%
In 2019, the company made a major adjustment to offline stores, and the overall operational efficiency improved significantly, especially ZsaZsaZsu and KissKitty. Online channels continued to make efforts, with online revenue growing by 36.5% in 2019 compared with the same period last year, and the share of revenue increased to 20.4% from 14.6% in 2018. Due to the impact of the epidemic, 2020Q1's offline stores were greatly impacted. The company accelerated online business development by means of live broadcast. The proportion of online revenue of 2020Q1 increased to 30.5%, gross profit margin was 61.4%, and gross profit margin was + 9.7pct compared with the same period last year.
Kid Technology: exceeding the performance promise, expanding the short video business is worth looking forward to.
Kid's revenue and net profit increased steadily, with revenue of 380 million yuan in 2019, + 24.6% year-on-year, and net profit of 110 million yuan, with a net profit rate of 102% in 2019. 2020Q1 has been greatly affected by the economic downturn. With the weakening of the epidemic, we believe that Q2 digital marketing business will reflect marginal improvement, and is currently in the MCN dividend period. The new business layout of short video is expected to bring new increments in performance, which is worth looking forward to.
Beifeng Capital shares to accelerate the transformation to build a C2M digital intelligent service platform
In the long run, we are still optimistic about the ability of North Peak Capital to upgrade the company digitally, including insight into consumer behavior, the establishment of a full industrial link, and modular disassembly of product research and development. to achieve the opening of the whole chain from design, creativity, production and sales. Finally, the company is driven to iterate from the traditional B2C mode to the C2M model to improve the operational efficiency in an all-round way.
Digital upgrade builds efficiency barriers and maintains "Buy" rating
Considering the impact of the epidemic, we estimate that the EPS of the company's 2020E-2022E is 0.45 yuan / 0.59 yuan / 0.70 yuan respectively (the previous value of 2020E-2021E is 0.64 yuan, 0.71 yuan). We adopt the distributed valuation method to carry on the valuation, the digital marketing comparable company's 2020 Wind consistency PE is 18.59 times, the footwear comparable company 2020 Wind consistency PE is 25.67 times. In the short term, with the weakening of the impact of the epidemic, the marginal improvement of footwear and digital marketing business is imminent; in the medium to long term, with the help of Beifeng capital, the company's digital upgrade is expected to comprehensively improve operational efficiency and competitiveness. Give the digital marketing business 21-23 times PE in 2020, shoes and clothing business 27-29 times PE in 2020, calculate the reasonable market value of 433-4.71 billion yuan, corresponding to the target price of 10.07-10.96 yuan, maintain the "buy" rating.
Risk tips: the impact of the epidemic exceeds expectations, the optimization of channels is not as expected, and the media restricts the opening of resources.