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Business attire The imbalance in the timing of revenue recognition, the decline in revenue resulting in a decrease in expense ratio, and the uneven quarterly distribution of income tax revenue are the main reasons for the decline in performance. . Revenue in the first half of the year was 376 million yuan, a year-on-year decrease of 13%; operating costs and net costs were 70.38 million yuan and 39.34 million yuan respectively, a decrease of 23% and 21% respectively over the same period last year. The main reason for the decrease in revenue is that the revenue confirmed by the professional wear business was not much in the first half of the year, while the main reason for the decrease in costs is that the decrease in revenue caused the expense rate to drop and most of the income tax was reflected in the first half of the year.
Foreign markets are affected by the increase in construction time and strategic adjustments in the U.S. market. The business wear business in the international market has not confirmed much in the first half of the year. In the second half of the year, with the stabilization of imports and the acceleration of export revenue, it is expected that revenue will resume stable growth throughout the year. There was a slight decline in import business in the first half of the year. Asia and Europe and the United States achieved revenue of 126 million and 116 million respectively, with slight decreases of 4.58% and 5.27% respectively. The decline in Asia was mainly due to the fact that the company took 10 more days off than normal holidays in the first quarter. , caused by the increase in completion days. In Europe and the United States, it is due to the company’s strategy in the U.S. market being adjusted. The company’s products are positioned at the high end, but in the past, U.S. customers were more concentrated in the mid-to-high end, which was biased against the company’s overall positioning, so the company took the initiative to adjust The customer structure has made adjustments to some customers who cannot bear the price reduction; the decline in export business is mainly affected by the confirmation of expenditure on business attire. Most of the orders in the first half of the year were received after May, while they began to be received in the first quarter of last year. Therefore, most of the revenue from business attire in the first half of previous years was not confirmed until the second half of the year.
Although the company’s revenue in the first half of the year showed an overall decline, the company’s 11-year goal in its annual plan is to achieve operating income of 1.2 billion yuan and operating costs of 230 million yuan. Judging from the company’s past operations, it has been achieved every year The purpose of the annual plan, so this purpose requires a certain guarantee of performance. It is estimated that with the stabilization of import business in the second half of the year and the confirmation of business wear revenue, the company’s full-year revenue growth can reach our previous expectations.
The adjustment of the U.S. market and the imminent confirmation of business attire have led to a slight decrease in gross profit margin. The decrease in revenue has led to a decrease in expenses. The uneven quarterly distribution of income taxes is the main reason for the decrease in costs. The company’s analytical gross profit margin in the first half of the year was approximately 32.52%, a slight decrease of 0.77 percentage points, of which the Asian business had a decrease of 4.99 percentage points. Due to strategic adjustments in the US market, the gross profit margin of the European and American businesses dropped by 2.15 percentage points, and the international business was mixed with listings. The company conducts collective import business and pure export business. The gross profit margin of export sales is high, because the export sales of business attire were not confirmed, which caused the gross profit margin to drop by 1.24 percentage points. According to communication, with the stabilization of the U.S. market and the confirmed increase in export business in the second half of the year, the gross profit margin for the whole year is expected to remain basically stable; sales and management expenses are generally well controlled, with a slight increase of 6.85% and a decrease of 3.79% respectively. , The increase in expense ratio is mainly due to the decrease in expenditure; the analysis income tax rate in the first half of the year increased from 28% to 33%, which also affected the increase in costs. However, because more income taxes were settled and settled in the first half of the year, the tax revenue in the second half of the year will be significantly increased.
Profit Forecast and Investment Rating: To sum up, the decline in the company’s performance in the first half of the year is mainly due to the imbalance in the timing of revenue recognition for business attire, the decline in revenue leading to a decrease in expense ratio, and the uneven quarterly distribution of income tax revenue. These factors will basically improve to a certain extent in the second half of the year: import business will stabilize and export business revenue will increase, so that annual revenue can achieve stable growth, so the expense rate can increase, and income tax will increase significantly in the second half of the year. Therefore, we basically stick to our previous predictions, estimating EPS for 2011-13 to be 0.96, 1.11 and 1.33 yuan/share respectively. The current valuation is 17 times that of 2011. We have previously warned the market about the risks of mid-term performance. The company has been in a critical stage of its “three three three” strategic transformation in recent years. Investment opportunities are largely catalyzed by performance. If performance rises as expected in the second half of the year, we can Choose a time point to grasp the phased opportunities.
Investment mainly depends on whether you can accept the style of this kind of company. Although the company’s export development currently does not meet the requirements of the market’s continued speed, it is relatively certain that the proportion will gradually increase, and the cost contribution is currently around 30%. , it is very likely that it will increase to about 40-50% in the next 2-3 years. Since the company’s brand operation still needs to accumulate experience, we still recommend treating the development of independent brands with a steady attitude.
In this process, we believe that the investment value mainly depends on the flexibility brought by the export business. If the safety margin is sufficient and the performance is catalyzed, we can pay attention. Maintain the rating of “Cautionally Recommended-A”.
Since the proportion of export costs can increase year by year, and is currently estimated to reach about 30%, it is recommended to combine the valuation based on export business and import business. According to our calculations, the import business achieved EPS of 0.45 yuan/share in 2011. The company belongs to an excellent first-class manufacturing enterprise. We can refer to the valuation levels of Lu Thai and Weixing to obtain a target PE of 15-17 times; the export business achieved 0.52 The EPS of RMB/share can be estimated at a certain discount to the PE of a mature brand company. If the target PE is 22-25 times, the company’s reasonable price is 18.09-20.53 yuan.
Risk factors: Uncertainty about the import business due to the recovery of international demand, and the development of private brands is lower than expected.
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