2017 performance was lower than expected
Youngor announced his 2017 results: revenue was 9.84 billion yuan, down 33.9% from the same period last year, while net profit was 297 million yuan, down 91.9% from the same period last year, corresponding to earnings per share of 0.08 yuan. Pay a dividend of 0.35 yuan per share. The lower-than-expected performance was due to (1) the decrease in the carry-over projects in the income-side real estate sector and (2) the provision of 3.3 billion yuan for CITIC Limited's impairment. 4Q17's single-quarter revenue fell 43.9% and turned into profit and loss compared with the same period last year. The company also announced 1Q18 results: revenue was 1.682 billion yuan, down 50.5% from the same period last year, and net profit was 509 million yuan, down 59.6% from the same period last year.
The income of the clothing business increased by 9.5% and the net profit increased by 38.8%. By channel, offline income increased by 12.1%, and online income increased by 32.8%. There were 2356 offline stores and 198net stores during the period, but because the strategic business area of its stores increased by 3.4% compared with the beginning of the year, while same-store sales continued to improve, the operating income of stores that had been open for one year, two years and more than three years increased by 13.5%, 11.7% and 13.7%, respectively. Destocking is basically over, clothing inventory is down 12%, gross profit margin is basically the same as the same period last year, slightly increasing 0.1ppt to 64%.
Due to the decrease in carry-over items, the income of the real estate business decreased by 52.7% and the net profit decreased by 18.6%. The amount of advance sale increased by 39.8%. There are 3 new projects, 2 completed projects and 9 projects under construction.
Investment business income fell by 5.5%. In 2016, the company changed the accounting method of Lianchuang Electronics, resulting in an investment income of 1.37 billion yuan. Up to now, Youngor has invested more than 30 billion yuan.
Gross profit margin increased 10.4ppt to 52.1%, mainly due to changes in income structure, low gross margin real estate business income declined; sales expense rate increased 8.5ppt to 20.5%, mainly due to the increase in decoration and rental costs; inventory turnover days increased by 333 days to 867 days.
Trend of development
It is expected that real estate projects in Ningbo and Suzhou will enter the delivery period in the second half of the year, with annual revenue growth of more than 30%. At the same time, the company expects clothing business revenue to grow by 1015%.
Profit forecast
Considering that 1Q18 performance is still declining compared with the same period last year, the 2018e profit forecast is reduced by 55.3% to 0.52 yuan, and the 2019e profit forecast is introduced, corresponding to a year-on-year increase of 531%. 20%.
Valuation and suggestion
At present, the company's share price corresponds to 16 times, 13 times 2018, 19-year Pram E. Maintain the recommendation and lower the target price by 15% to 11.37 CNY. The target price is given by the valuation of clothing (15 times 2018 PMaple E), real estate (DCF) and investment (fair value) segment. The new target price corresponds to 22 times 18-year overall PMaple E, implying 39.5% upside space.
Risk.
Uncertainty in the settlement of real estate and investment business income.