Overview of events

The company forecasts 23H1 revenue of 3.4-380 million yuan, an increase of 43% over the same period last year; net profit of 1100-16.5 million yuan, reversing losses over the same period last year; deducting non-net profits of 850-12.75 million yuan, reversing losses over the same period last year. Of this total, 23Q2 revenue is about 1.52-192 million yuan, an increase of 44 percent over the same period last year; net profit / deduction of non-net profit is about 270,820,170-5.95 million yuan, reversing losses over the same period last year. Our analysis, the company to achieve turnaround mainly due to: (1) X-BIONIC revenue to maintain rapid growth, we analyze benefit from offline independent store opening, online growth, and offline passenger flow recovery brought about by the same store growth; (2) benefit from offline passenger flow recovery, gross profit margin increase, we expect the main business Sanfu Collection Store and Squirrel Paradise to achieve turnaround.

On July 13, the company announced that Shanghai Flying Frog Trading Co., Ltd., a wholly-owned subsidiary, recently signed an "exclusive agency agreement" with Houdini Sportswear AB for a period of 23.7.1-28.12.31. Houdini brand was founded in 1993 by Swedish mountaineer and female designer Lotta Giomofelice, headquartered in Stockholm, Sweden. The brand emphasizes the combination of function and fashion, and is famous for its scientific and technological innovation materials and cold color matching. The product line is mainly skiing and hiking. At the same time, the brand always adheres to the concept of environmental protection and minimalism, and devotes itself to the research and production of sustainable fabric products. All clothing products launched can minimize environmental pollution while maintaining functionality. It is one of the representative brands of Nordic outdoor aesthetics. With innovative fabrics, cutting-edge design and environmental awareness, it has become one of the Nordic iconic outdoor brands.

Analysis and judgment:

X-BIONIC revenue maintains rapid growth and is expected to make a profit this year. We expect the XB brand to double with the rapid opening of stores after the epidemic, and according to the performance forecast, XB has grown by more than 50 per cent in the first half of the year. (1) in terms of store opening, the brand cooperates with Vientiane City system this year. According to the 22 Annual report, 2-3 new XB flagship stores and 5-8 XB brand franchise stores are planned to be opened this year. According to investor questions and answers, Beijing DT51 and Shenzhen Vientiane City have been opened, and Changchun and Shenyang Vientiane City have signed contracts. (2) in terms of products, the proportion of the outer layer has increased more than expected. On the one hand, the company has added the basic model of the inner layer, that is, the loose hem increases, expanding the road running and hiking crowd; on the other hand, it has added business and golf series to make up for the off-season sales of the inner layer. (3) in marketing, increase investment in brand marketing and channels, on the one hand, achieve brand breakage through brand spokesmen and social media such as Little Red Book, Douyin and Weibo Corp; on the other hand, increase sponsorship of professional events, including Chongli 168Cross-country Race, Triathlon, municipal or national events, business school activities, etc., and organize member activities, such as snow season skiing and mountaineering.

Offline passenger flow recovery and gross profit margin increase, to achieve a turnaround. The offline passenger flow of the main outdoor supplies has gradually recovered, online sales have maintained growth, and sales gross profit margin has increased to achieve a turnaround from losses to profits. Squirrel park Q2 passenger flow recovery is good, the event section to increase activity marketing investment, according to the company customs activity record table, Q2 successfully held Chongli 168 cross-country race, Pinggu Triathlon and other activities. According to the 22 annual report, the company plans to open 1-2 offline brand collection stores, 3-4 multi-brand, multi-category flagship stores and 5-6 ski shops this year, focusing on creating the Swedish mountain classic brand Klattermusen (mountain rat) + Italian craftsmanship heritage shoes classic CRISPI+ shoes brand DANNER+ tactical backpack brand Mystery Ranch+ professional outdoor shoes brand LASPORTIVA agent brand matrix.

Investment suggestion

According to our analysis, (1) there will be a recovery after the X-BIONIC epidemic, which is expected to reflect high growth, and the profit end is expected to turn losses into profits; (2) Outdoor services, that is, "Squirrel Tribe parent-Child Outdoor Park + Sanfu Little Warrior + Eagle Junction Safety Education Base" ushered in the recovery of passenger flow after the epidemic, and the parent-child plate is expected to make a profit. (3) in the future, the company will focus on building the Swedish mountain classic brand Klattermusen + Italian craftsmanship heritage shoes CRISPI+ classic tooling shoes brand DANNER+ tactical backpack brand Mystery Ranch+ professional outdoor shoes brand LA SPORTIVA agent brand matrix, 22 years mountain climbing rat sales of 50 million yuan, an increase of more than 1000%, 23Q1 mountain climbing rat sales revenue of about 17 million yuan, an increase of 302% over the same period last year. The company announced in May 23 that it intends to increase no more than 180 million yuan to the chairman, Mr. Zhang Heng, and the subscription price is 9.39 yuan, which is mainly used to supplement working capital, optimize financial structure and reduce financial risk. Maintain the 23-25 income forecast of 7.31 soybean 9.15 / 1.164 billion yuan, maintain the 23-25 return net profit forecast of 0.31 scarp 0.61 hundred million yuan, maintain the 23-25 year EPS forecast 0.20 pound 0.39 pound 0.57 yuan, and close at 13.22 yuan on July 14, 2023, corresponding to the annual PE valuation of 67x34x23X in 23-24-25, maintaining the "overweight" rating.

Risk hint

The operation of X-BIONIC is not as expected; the passenger flow of Squirrel Park is not as expected; the expansion of offline stores is not as expected; the increase to the chairman is not completed; systemic risk.