森马服饰(002563):利润显著改善 多渠道毛利率提升 柔性供应提高货品流转

Semir Apparel (002563): Profit significantly improved, multi-channel gross margin, increased flexible supply, increased product circulation

天風證券 ·  09/05

The company released its semi-annual report for 2023. The company's 23Q2 revenue was 2.56 billion yuan, an increase of 9.7% (same decrease of 9.3% in 23Q1), net profit attributable to a net profit of 200 million yuan, an increase of 295.8% (23Q1, same increase of 48.9%), net profit of non-attributable income of 190 million yuan, same increase of 217.5% (same increase of 48.9% in 23Q1); 23H1 achieved revenue of 5.56 billion yuan, same decrease of 1.4%, same increase of 393.9%, net profit of non-attributable income of 480 million yuan, same increase of 1818.22%.

By channel, 23H1 online sales were $2.61 billion (47.3% of total revenue), same decrease of 6.4%; direct sales of 670 million dollars (12.1% of total revenue), same increase of 22.0%; franchise sales of 2.15 billion dollars (39.0% of total revenue), same increase of 7.4%; joint sales of $85 million (1.5% of total revenue), same decrease of 65.6%.

By product, 23H1 casual apparel sold 1.68 billion dollars (30.6% of total revenue), the same decrease of 15.1%; children's clothing was 3.82 billion yuan (accounting for 69.4% of total revenue), an increase of 6.3%.

As of June 30, 2023, the company's monetary and other cash assets were $8.11 billion; operating activities generated net cash of $83 billion (22H1 was -290 million). Cash reserves were sufficient, which is conducive to the company's sustainable development in the future, and to promote the implementation of multi-brand development strategies through investment and cooperation.

23H1's gross profit margin was 44.6%, an increase of 3.5 pct; the return net interest rate was 9.3%, an increase of 7.4 pct.

The sales/management/ R&D/ finance expense ratios were 25.2%/5.0%/1.8%/-1.4%, respectively, compared to 2.5/-0.1/-0.3/-1.0 pct. The decrease in the sales expenses ratio was mainly due to a year-on-year decrease in advertising and service fees.

By channel, 23H1 online sales gross margin was 41.7%, same increase of 4.4 pct; direct sales margin was 70.4%, same increase of 4.5 pct; franchise margin was 39.5%, same increase of 3.4 pct; joint venture gross profit margin was 62.7%, same decrease of 5.2 pct.

By product, the gross profit margin of casual clothing was 40.6%, an increase of 1.5 pct; the gross profit margin of children's clothing was 46.4%, an increase of 4.3 pct.

In terms of inventory, 23H1 apparel inventory turnover was 207 days, and the number of apparel stocks was 79.7 million pieces; 23H1's inventory balance was 3.17 billion dollars, down 2.3% from the end of '22, mainly due to a year-on-year decrease in purchases of 23H1 goods.

E-commerce direct saling+dropshipping operates through multiple channels. Online and offline complementary diversified development companies set up online stores on third-party e-commerce platforms such as Tmall, JD, Douyin, etc., or sell through online e-commerce platforms or distributors. The transaction amount of 23H1 Tmall and Douyin platforms was 174/1.03 billion, respectively, and the return rate was 42.1% /38.0%, respectively.

Offline channels include franchise distribution, direct marketing sales, and joint sales. Franchisees and distributors account for more than 30% of sales revenue. In terms of the number of stores, as of June 30, 2023, there were 699 direct-run stores (net decrease of 24); 7,371 franchise stores (net increase of 35); and 66 affiliated stores (net decrease of 15). By product (brand), as of June 30, 2023, there were 2,694 casual apparel (net decrease of 57); children's clothing was 5,442 (net increase of 53).

Semar+ Barabara lays the revenue foundation. The multi-brand matrix covers all categories of Semir Semir in China. The main price ranges from 100-800 yuan, covering Tier 1-4 cities.

Continue to deepen the transformation of the product management system, increase the market share of mental products on the product side, increase the versatility rate of all types of products, and strengthen the integrated follow-up of leading products. 23H1 omni-channel volume exceeds 1.8 billion; deeply cultivating the Xiaohongshu position has brought millions of people's assets to the channel and driven a 124% increase in user active searches.

Balabala Balabala focuses on children aged 0-14. The main price ranges from 100 to 500 yuan, covering Tier 1 to 4 cities. The product management system has been strengthened, focusing on the growth of mental categories. The management of each product line puts efficiency first, and the sell-out rate of new products has improved markedly. At the same time, control of various expenses has been strengthened, and the brand's business quality and profit level have improved quite well. The Balabara brand uses flexible supply as an important gripper to improve the efficiency of product circulation and promote the growth of old stores. In the summer of '23, the share of flexible supply increased significantly, and terminal stores covered by flexible supply achieved comparable double-digit store growth. On the marketing and promotion side, the Balabara brand focuses on the promotion and sales of top single products, invests in main marketing resources, and follows a closed loop in real time to drive overall brand growth with explosive product growth.

Macara MarColor focuses on post-95 middle class families and post-85 two-child families. The main product types are clothing brands for infants and toddlers aged 0-7, with prices ranging from 99-599 yuan, covering 2-3 tier cities. Spring and summer combine the pain points of the consumer scene and work with leading supply chains in the industry to create a series of star products.

MiniBala focuses on the new generation of families and up-and-coming white-collar exquisite mothers. The price ranges from 100-700 yuan, covering Tier 1-3 cities. Features Express the concept of family parent-child companionship in a childlike art style. The positioning has been completely upgraded, creating a strong brand perception, making the product a bridge for parent-child relationships, and focusing on the refined operation of the core group of the brand.

Hey Junior focuses on young children and middle school students. The main product type is school uniforms. Prices range from 100 to 600 yuan, covering Tier 1 to 3 cities. In terms of brand naming, HeyJunior (HeyJunior) uniforms sponsored the first Wenzhou Footwear Industry AIGC Design Competition as an exclusive sponsor for the first time, and achieved a total global exposure of 1000W+.

The cooperative brand Asics Kids focuses on Asics (Asics) children's clothing, and offline focuses on core shopping centers to expand offline stores; online business continues to invest in high growth; Puma Kids focuses on 1-3 core business districts to create a differentiated brand image, and divides products into two categories: sportstyle and performance, to meet users' wearing needs in different scenarios.

Maintain profit forecasts and maintain “buy” ratings

The company is steadily promoting multi-brand business plans. Semma has gathered to expand advantageous categories and upgrade quality experience, Barabara has increased investment in store renovation and image upgrading, Macara has accelerated the circulation of global products during the mid-season, achieved global sales integration, MiniBala simultaneously actively developed offline and laid out a new landscape for brand retail development. Hey Junior promotes the brand's influence in the school uniform industry through a portal website, creates memory products, and creates a more comfortable wearing experience for students. We expect the company's net profit to be 10.2/12.7/1.47 billion yuan in 23-25, respectively, 0.38/0.47/0.54 yuan/share for EPS, and 17/13/12x for EPS, respectively.

Risk warning: macroeconomic fluctuation risk; brand operation risk; raw material price change risk; inventory management and price drop risk; import and export trade risk, etc.

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