Starting shares (603557) 2018 annual report comment: 18Q4 performance trend in hand with Alibaba layout new retail
The 18-year revenue increased by 4%, the net profit fell by 7%, and the 18Q4 net profit margin changed by 2018.9.9 billion, an increase of 4.43%, net profit attributable to mother 1.8.1 billion, down 7.05%, deducting non-net profit 1.4.3 billion, down 11.85%, EPS is 0.38 yuan, to send 10 to 0.4 yuan (including tax).The company’s lower-than-expected net profit was mainly due to the gap in cost increases.The lower growth rate of net profit was mainly due to the increase in the sales expense ratio and the increase in asset impairment losses. In terms of quarters, 17Q3-18Q4 company revenues increased by 10 each.58%, 11.51%, 4.06%, 9.50%, -2.20%, 5.82%, net profit increased by 4.66%, -5.43%, 9.15%, 7.30%, -2.45%, -38.78%.In terms of revenue, the 18Q3 company’s channel adjustments led to an improvement in revenue, and the 18Q4 revenue resumed growth, mainly due to the single quarter single store revenue growth4.03%; In terms of net profit, the sales expense ratio of the company in 18Q4 increased by 3.02PCT, asset impairment losses increased by 3708.77% to 900.92 mm results in a higher net profit level. Off-line revenue has grown steadily, and the division of the business that led to an increase in the growth rate of online revenue caused by the adjustment of the team: In 2018, the company’s ABCKIDS brand and shoe OEM business achieved revenue12.6 billion, 1.27 trillion, the same increase 2.39%, 16.51%.In 武汉夜网论坛 2018, the company’s ABCKIDS brand online revenue increased by 1.60% to 1.1.5 billion, offline income increased by 2.47% to 11.45 trillion, of which the offline extension of ABCKIDS total number of stores at the end of 18, 2397, the same increase of 0.04%, sub-segment of direct-operating channel openings, endogenous store single-store revenue increased by 2 as well.42% to 47.780,000 yuan. In terms of channels: In 2018, the company operated directly, and its distribution (including private label and OEM) channels achieved revenue1.3.2 billion, 12.5.5 billion, an increase of 4.34%, 3.48%, of which the sales revenue of private label increased by 2 as well.16%.The company’s direct-operated e-commerce channels realized revenue1.1.5 billion, an increase of 1.60%, a growth rate of +56 over 17 years.A significant reduction of 94% 夜来香体验网 was mainly due to the adjustment of the online team; the opening of 8 to 23 offline direct-operated stores contributed to a 27% increase in offline direct-operated revenue.33% to 1710.300,000 yuan; offline extension of offline own-brand distribution stores also decreased by 0.29% to 2374, the revenue of the distribution single store increased by 2.46% to 47.520,000 yuan, the optimization of channel structure drives revenue growth. By category: in 2018, the company’s children’s clothing, children’s leather shoes, children’s sports shoes, children’s shoes, children’s clothing accessories, footwear OEM and other income were 4 respectively.7.2 billion, 2.9.3 billion, 4.69 ppm, 1227.810,000 yuan, 1496.380,000 yuan, 1.2.7 billion, an increase of 5 respectively.19%, 15.23%, -8.46%, 83.22%, 60.82%, 16.51%.The company ‘s children ‘s shoes and apparel accessories have a high growth rate, mainly due to the above-mentioned categories of distributors in Jiangsu, Hubei, and Sichuan increasing gradually, while the online sales of shoes and accessories increase proportionally. Gross profit margin, expense ratio increased, inventory turnover speed indicator gross profit margin: the company’s gross profit margin increased by 0 in 2018.55PCT to 35.60%, in which children’s clothing, children’s shoes, footwear OEM gross margin increased by 2 respectively.37PCT, 0.06PCT, 3.25PCT to 38.15%, 38.47%, 12.26%, the company strengthened the control of wholesale discounts and improved profitability.17Q3-18Q4 company gross profit margins were 35.68% (+2.53PCT), 33.82% (-1.37PCT), 36.37% (+1.57PCT), 36.36% (+0.04PCT), 36.84% (+1.16PCT), 33.77% (-0.05PCT). Expense rate: Expense rate increased by 1 during 2018.94PCT to 20.66%, of which the sales expense ratio increased by 1.25PCT to 12.58%, mainly due to the expansion of sales scale; management expense ratio (considering research and development expenses) also increased by 0.23PCT to 7.48%, mainly due to the increase in the company’s consulting agency fee; the financial expense rate also increased by zero.47PCT to 0.60%, mainly due to the increase in corporate interest expenses. Other financial indicators: 1) The company’s inventory at the end of 2018 was 1.55 ppm, an increase of 16 over the beginning of the period.75%, mainly due to the increase in stocks of futures stocks of distributors, the increase in clothing and leather shoes inventory; 18-year inventory / income ratio11.08%, inventory turnover profit 6.26 and 17 are 9.93%, 7.32. The inventory turnover speed has improved. 2) At the end of 2018, the company’s accounts receivable increased by 24 compared with the beginning of the period.81% to 5.1.1 billion US dollars, mainly due to the expansion of sales scale, increased dealer support, 18 years of accounts receivable turnover costs.04 and 17 are 3.56, a year down. 3) Asset impairment losses increased by 196 in 2018.96% to 2080.680,000 yuan, mainly due to the loss of bad debts, the loss of inventory price losses increased. 4) The company’s non-operating income decreased by 12 in 2018.30% to 2932.450,000 yuan, mainly due to a decrease in government subsidies for ten years. 5) The company’s net cash flow from operating activities in 2018 was 6,356.450,000 yuan, down 53.52%, mainly due to the company’s sales of goods, the cash received for providing services has repeatedly decreased. Cooperate with Alibaba to create new retail projects and optimize the efficiency of the main business. In April 2019, the company announced a change in the fundraising project. It will integrate the marketing network and regional operation center construction projects to replace the new retail and new manufacturing projects.The company cooperates with the technical team of Alibaba Dharma Institute, using foot scanners, smart stores and other tools to achieve customized measurement-production-release business models of children’s shoes, that is, after the customer measures the foot shape offline, the company provides shoes selection through system data calculationSuggestions for selection, and the factory will produce children’s shoes that meet the customer’s foot shape. The company actively deploys new retail and optimizes the transformation efficiency of the industrial chain.The company actively introduces information technology, enhances the management level of the enterprise, builds an intelligent product management platform and a big data analysis platform, and plans to cooperate with Alibaba to transform its omni-channel digital capabilities to provide flexible production, sales forecast, product analysis, and new product development for the company.And so on to provide support.In the future, the company will build smart experiential stores and flexible factories, improve supply chain management capabilities, and accelerate product turnover. Expansion of distribution stores is expected to resume, and equity participation in Zehui Technology is involved in the cross-border e-commerce industry. We believe that: 1) In 2019, the company will increase investment efforts and expand blank markets.Single store revenue increased steadily.After the adjustment of the online team is expected to resume rapid growth through Alibaba channel resources.2) In 2018, the company strengthened the control of distribution discounts and the profitability recovered. It is expected that the company will continue to strengthen the control of terminal discounts and launch more high value-added and high gross profit margin products, which will continue to improve profitability.3) The company’s announcement in December 2018 intends to use 2.$ 10 billion acquisition of cross-border e-commerce company Zehui Technology11.43% shares, expanding business scope.Zehui Technology was established in 2003 and is mainly engaged in cross-border B2C online sales. Its products include clothing, shoes, hats, beauty, makeup, 3C electronics, etc., which are sold through international e-commerce platforms such as eBay and Amazon. Revenue from January to September 201812.7.8 billion, net profit 7867.980,000 yuan, promising a net profit of not less than 1 in 2019-20.5/2 billion.After the acquisition of Zehui Technology, the company will expand foreign sales channels and increase profit levels.4) In March 2019, the shareholder Bangao Co., Ltd. planned to use centralized bidding and planned to reduce its shareholding by no more than 2845 due to its own funds.440,000 shares, accounting for 6% of the total share capital. At present, the concentration of the baby shoes industry still needs to decrease. In 2018, the company’s children’s shoes market share was 3.6%, ranking first in the industry, the market share of children’s clothing is 0.5%, ranking seventh in the industry, and has increased market share.Regardless of mergers and acquisitions, taking into account the company’s new retail and other project costs, the expense ratio has increased, and we lower the EPS for 2019-20 to 0.44/0.50 yuan (previous average 0.53/0.60 yuan), EPS is predicted to be 0 in 2021.56 yuan, which currently corresponds to 24 times in 19 years. We are optimistic about the rapid development of the children’s shoes and apparel industry, the company’s growth space, and cooperation with Alibaba., Maintain “Neutral” rating. Risk warning: industry competition is intensifying, small non- lifting of the ban, and the number of newborns is growing less than expected.