Main points of investment
Intimate underwear bibcock, the performance is under pressure in recent years. The city beauty brand was founded in 1998 and listed in Hong Kong in 2014. it is the leading lingerie brand in China, with a market share of 1.4% in 21 years, second only to Uniqlo (1.8%) and admiration (1.5%).
In 11-15, the performance was good, the CAGR of income / net profit was 32% / 34%, the channel quality was adjusted and optimized, the income decreased slightly and the net profit decreased sharply compared with the same period last year. In 17-18, the effect of channel adjustment was gradually reflected, and the CAGR of income / net profit was + 6% and 25%. Over the past 19 years, there has been a serious backlog of channel inventory, with more than 1000 net stores and large impairment losses, resulting in a year-on-year loss of-20% / net profit of 1.3 billion. Affected by the epidemic over the past 20 years, net profit has been in a state of loss, with 22H1 revenue / net profit of 16.18 / 10 million yuan and-11.43% respectively compared with the same period last year.
Bra products are the main products, and the proportion of revenue from direct marketing and e-commerce has increased significantly in recent years. 1) from the perspective of sub-channels: the proportion of direct revenue has increased significantly, and the growth momentum of e-commerce channels is good. In 17-21, the CAGR of direct operation / e-commerce / franchise income was + 3%, 11%, 29%, respectively. The structure of the company's offline stores continued to be optimized, and the proportion of revenue from direct stores increased to 55% during the period. The growth momentum of e-commerce business is good, and the share of revenue has increased from 12% in 17 years to 26% in 21 years. The revenue of 22H1 direct operation / e-commerce / franchise is-14%, 7%, 10%, 47%, 21%, 29%, respectively, compared with the same period last year. 2) Sub-product view: bra products are the main products, while operating underwear, pajamas and household clothes, warm clothes and other products. The CAGR of bra / other products in 17-20 was-13% and 12% respectively, and the income from bra products accounted for relatively high, and stabilized at about 50% in 17-20.
In recent years, profitability is under pressure, 22H1 gross profit margin, expense rate are declining. 1) Gross profit margin: the gross profit margin has been stable at more than 42% since 17 years, and only dropped sharply to 23% in 19 years, mainly due to the provision of 740 million yuan in one-time inventory impairment (reflected in the cost of sales). 22H1 gross profit margin year-on-year-2.1pct to 46.6%, mainly due to the sharp rise in the price of raw materials. 2) expense rate: due to the rigidity of rent, personnel and other expenses, the expense rate has been increasing in the past 17 years. 22H1 year-on-year-0.5pct to 47.96%, in which the sales / management / financial expense rate is respectively year-on-year-0.6/+0.3/-0.2pct. The decrease in sales expense rate is mainly due to the reduction of consignment commission in franchise stores.
3) net interest rate: the net interest rate has been under pressure in recent years, because the gross profit margin is lower than the expense rate, and the 22H1 net interest rate is from-0.2pct to + 0.63% compared with the same period last year.
Positioning the world's leading professional underwear, the second venture is expected to regain the momentum of growth. In 1998, Zheng Yaonan led the company to list in Hong Kong, with excellent performance and substantial store expansion. in the past 16 years, due to the over-aggressive store expansion, the channel quality deteriorated and the operation fell into crisis, and the company recruited professional executives to manage it. but performance growth is still weak. In November 21, Zheng Yaonan, the founder of the company, returned to the front line of management and returned to the helm of CEO, redefining the company's brand positioning of "the world's leading professional underwear", and continuously promoting reform in channels, products and digitalization. 22H1 results are beginning to show: 1) channels: constantly optimize members, Mini Program and other intelligent retail system The number of 22H1 members increased by 1.11 million to 60.68 million, the repurchase of members increased by 3%, the average consumption increased by 8%, and the unit price of members increased by 7%. 2) products: 22H1 continues to adjust the product structure, focus on bra + underwear products, and upgrade for popular style single soft cup bra, clean cotton home service, high elastic underwear, the market reputation is good, among which Vbra non-size stay cable bra entered into the company's monthly sales TOP5 after only one month on the market. 3) Digitalization: in March 22, it formally signed strategic cooperation with JD.com Science and Technology to carry out in-depth cooperation in the field of digitization.
Profit forecast and investment rating: the company is the leading lingerie company in China, and its performance is under pressure in recent years. After the founder returns to the front line at the end of 21, we look forward to the effect of the follow-up reform. The performance of 22H1 has been affected by the epidemic, which has weakened since June and is expected to improve gradually in the second half of the year. We estimate that the net profit of homing in 22-24 years will be 0.32 euro 137 million yuan, EPS 0.01 pound 0.03 pound 0.06 yuan respectively, corresponding to the 22-24 year PE 12 pound 6max 3X, the first coverage will be given a "neutral" rating.
Risk tips: worsening epidemic situation, overstocking, weak end consumption and so on.