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九牧王(601566):Q3主品牌线下增长亮眼 存货跌价产生拖累

Jiumuwang (601566): Q3 main brands had impressive offline growth, and falling inventory prices were a drag

浙商證券 ·  Nov 7, 2023 00:00

Key points of investment

Q3 revenue grew in double digits. Asset impairment losses dragged down profit 23Q1-Q3 to achieve revenue of 2.138 billion yuan (+9.6%), net profit of 96 million yuan (turning loss into profit), net profit of 145 million yuan (+174%) after deduction of net profit of 145 million yuan (+174%); single Q3 revenue of 737 million yuan (+11.0%), net profit of 3.86 million yuan (+194%), net profit of 6.43 million yuan (+194%) after deduction of net profit of 6.43 million yuan (+194%). Profit was mainly due to Q3 calculated asset impairment losses of 1.55 million yuan (+194%) for the same period last year (1.55 million yuan). 1.21 100 million yuan).

The main brand continues to expand stores and close small stores. The online growth rate is temporarily under pressure. By brand: Q3 main brand revenue was 672 million yuan (+13.5%), direct-operated/franchise stores increased by +85/-110 at the beginning of the year to 654/1525 (of which 33/-58 were net opened, and 52 franchise stores withdrew to direct management). The area of directly/franchise stores was +11%/2% compared to the beginning of the year to 155/160 square meters; Q3 sub-brand ZIOZIA/FUN revenue was 0.20/034 million yuan (+8.4%/-14.3%), FUN, The major decline was mainly due to continued channel optimization (net sales of directly/franchise stores from 12/12 to 59/50 during the year).

By channel: 23Q3 franchise/direct-operation/online revenue was 4.38/2.05/54 million yuan, +11.6%/+28.7%/-13.6% over the same period last year. The impressive growth rate of direct sales comes from continued expansion of stores and recovery in store efficiency; the online Q3 growth rate is under pressure. We expect that due to declining e-commerce platform traffic and increased competition, the company is more restrained in terms of discounts and marketing efforts.

The increase in gross margin and the decline in the sales expenses ratio. Inventory impairment dragged down the 23Q3 gross profit margin of 62.9% (+3.1 pp), mainly driven by franchise year +7.4 pp year on year, while direct-operation/online sales ratio -8.7/-2.4 pp. We expect seasonal fluctuations caused by the release of summer products at the end of the quarter. Judging from the previous three quarters, direct-operation/online gross margin was basically the same year on year.

The expense ratio for the first three quarters was 44.2% (-4.5pp), of which the sales expense ratio was 34.9% (-2.6pp). We expect to benefit from the refinement of marketing investment and natural dilution after revenue growth; the financial expense ratio is -0.1% (-1.2pp), mainly due to the increase in interest income after the increase in monetary capital.

The loss of $155 million in asset impairment in 23Q3 ($121 million in the same period last year) dragged down net profit. We expect mainly from 52 franchise stores taking back and switching to direct management, as well as inventory impairment losses for summer products after the end of the season. 23Q3 investment income - 8.09 million yuan (including net investment income plus profit and loss from changes in fair value), which is narrower than the loss of -66.51 million yuan in 22Q3.

Profit forecasts and investment suggestions:

The company continues to deepen the strategic transformation of “men's pants experts”, and has achieved outstanding results in improving product power, brand power, and channel power. Under effective discounts and cost control, positive operating leverage is expected to bring high performance flexibility; at the same time, the company plans to sell financial assets and return to the main business, and performance volatility is expected to decrease.

The company is expected to achieve revenue of 29.8/34.2/3.88 billion yuan in 23-25, a year-on-year increase of 14%/15%/14%, and realized net profit of 1.9/3.4/4.2 billion yuan, turning a year-on-year loss into profit/ +82%/+23%, corresponding to PE 31/17/14 times, maintaining a “buy” rating considering the company's high performance elasticity.

Risk warning: brand marketing results fall short of expectations; store efficiency improvements in teenage stores fall short of expectations

The translation is provided by third-party software.


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