The first half of 2017 results are in line with expectations.
Youngor announced results for the first half of 2017: operating income was 5.399 billion yuan, down 37.7% from the same period last year; net profit attributed to the parent company was 2.047 billion yuan, down 33.3% from the same period last year, corresponding to earnings per share of 0.57 yuan. The deduction of non-net profit decreased by 19% compared with the same period last year, which was narrower than the reported net profit, mainly due to a sharp decrease in non-current asset disposal gains and losses in non-recurrent gains and losses. The performance was in line with expectations, and the decline was caused by the carry-over cycle of real estate projects.
2Q17 revenue fell by 35.5%, while net profit increased by 26%, an improvement over 1Q17.
Clothing business revenue increased by 10.7% net profit increased by 13%, benefiting from the big store strategy. By channel, online revenue increased by 39.2%. There were 2469 offline stores and 85 clearance stores during the period, but the strategic business area of the big stores increased by 2.3% compared with the beginning of the year. at the same time, the efficiency of all kinds of outlets has increased: the average sales revenue of self-operated outlets, shopping centers and shopping malls increased by 10.6%, 11.9% and 14.3% respectively compared with the same period last year. Destocking is basically over, gross profit margin is basically flat year-on-year, slightly reduced 0.1ppt to 65%.
Due to the decrease in carry-over items, the income of the real estate business decreased by 54.2% and the net profit decreased by 61%. The amount of advance sale increased by 78.8%. There are 2 new projects, 2 completed projects and 9 projects under construction.
Investment business income fell by 20.7%. In the first half of 2016, the company changed the accounting method of Lianchuang Electronics, resulting in an investment income of 1.24 billion yuan. So far, Youngor has invested a total of 31 billion yuan.
Gross profit margin increased 4ppt to 48.4%, mainly due to changes in income structure, low gross margin real estate business income declined; sales expense rate increased 8.1ppt to 16.7%, mainly due to the increase in decoration and rental costs; inventory turnover days increased by 236 days to 741 days.
Trend of development
Real estate is expected to add 259200 square meters of saleable area in the second half of the year, with an annual pre-sale target of 7 billion yuan. At the beginning of the year, it is expected that the growth rate of brand clothing business is expected to reach 10%.
Profit forecast
Keep the profit forecast for 2017 and 18 years unchanged. It is estimated that the net profit per share in 2017 and 18 years will be 1.11 yuan and 1.18 yuan, an increase of 8.3% and 5.4% over the same period last year.
Valuation and suggestion
At present, the company's share price corresponds to 9.2 times, 8.8 times 2017, 18-year Pram E. Maintain the recommendation and reduce the target price by 27% to RMB13.30. The target price is valued by the apparel (18 times 18-year Pmax E), real estate (DCF) and investment (fair value) segments, taking into account the increase in equity; the new target price corresponds to 11 times 18-year overall Pamp E, implying 29% upside space.
Risk.
Uncertainty in the settlement of real estate and investment business income.