Seven Wolves (002029) Annual Report 2018 and 2019 First Quarterly Comment: Brand Men’s Implantation Improves Cash and Helps Continue to Grow Performance
18-year revenue double-digit growth, 19Q1 revenue growth indicator, thickened investment income, profitable companies achieved revenue of 35 in 2018.
1.7 billion, with an annual increase of 14.
01%, net profit attributable to mother 3.
46 ppm, an increase of 9 in ten years.
38%, net of non-attributed net profit2.
06 ppm, an increase of 17 in ten years.
46 yuan, 1 yuan (including tax) is proposed for 10 yuan.
The lower growth rate of net profit attributable to mothers was mainly due to the increase in expense ratio and the increase in subsidy expenses.
Looking at the quarterly order, 17Q1?
The 18Q4 revenue growth rate was 13 each year.
03%, net profit attributable to mother increased by 9 times.
The company achieved revenue in the first quarter of 20199.
48 ppm, an increase of 3 in ten years.
13%, the net profit attributable to the mother was 91.65 million yuan, exceeding the appreciation by 9.
45%, deducting non-net profit of 64.15 million yuan, downgrading for 4 years.
The company’s revenue continued to improve from 16Q4 to 18Q4, and basically maintained double-digit growth.
Before 18 years, the higher growth rate of the knitting business and the e-commerce channel has driven the overall growth. Since 18 years, the knitting revenue has increased slightly. The increase in revenue has mainly come from the rebound of offline men’s clothing and the continuous growth of online sales.
The increase in revenue growth in 19Q1 has improved, mainly due to the weak retail environment and a high industrial base (late Spring Festival in 18, the peak sales season coincides with the overlap of cold winter and the favorable conditions in 18Q1 have contributed to a higher base in 18Q1).Higher than income, mainly due to the increase in fair value changes in revenue, expenses and other contributions.
Revenue split: The improvement of the brand’s menswear business contributed mainly to the growth, and the knitting business slightly shifted. In terms of business, the main clothing industry achieved revenue33.
80 ppm, an increase of 12 in ten years.
76%; information technology and service industry income 1702 million, multi-year value-added 102.
02%; other 1.
20 ppm, an increase of 52 in ten years.
According to the breakdown of the main clothing industry: 1) The total revenue of the seven wolves men’s clothing in 2018 is estimated to be about 2.4 billion, with each increase of about 20%, of which the online channel sales account for more than 30%, and the increase exceeds 25%, and the offline channel salesGrowth in high double digits.
2) Knitting business revenue is more than 1 billion, which is slightly higher than 2% each year.
3) The size of small brands is still small. Among them, the KL brand ‘s 18-year revenue was 31.39 million yuan, which became 4014 million. The 16N revenue volume was tens of millions, which may also drag down overall performance. Wolf Totem is a series of the original seven wolvesThe transformation into an independent brand is also exploring and enriching the category.
From the endogenous perspective, the number of stores of the seven wolves at the end of 2018 is estimated to be around 2,000, and the net increase in 18 years was less than 100. Therefore, in terms of the growth of the offline channels of the seven wolves in 18 years, the growth of the endogenous single store was the main contribution.
Small-brand stores have the least number of dozens of stores in total.
The increase in the expense ratio exceeded the gross profit margin, the increase in the inventory accrual ratio decreased, and the investment income increased. The gross profit margin increased by 1 in 18 years.
93PCT to 42.
60%, mainly due to the change in business structure, the brand’s men’s clothing continued to pick up and contributed to the increase.
18Q1-19Q1 single quarter gross profit margin +0.
05, + 4.
20, + 2.
Expense rate: 18 years extension 3.
57PCT to 25.
10%, of which sales, management + research and development, and financial expense ratios are 16.
During the 19Q1 period, the expense ratio was maximized by 3.
79PCT to 23.
24%, of which sales, management + research and development, and financial expense rates are +3 respectively.
Other financial indicators: 1) Inventory at the end of 18 increased by 11.
96% to 9.
6.5 billion, inventory turnover rate 2.
21 compared to 17 in 2.
08 has accelerated.
In terms of inventories, the provision for falling prices at the end of 18 years was slightly less than the end of 17 years.
44% to 4.
99 ppm, the price reserve / inventory ratio decreased by 6 compared with the end of 2017.
44PCT to 51.
The company’s inventory depreciation reserve provision ratio 11?
It continued to rise in 17 years, reaching a high of 58 in 17 years.
14%, in 18 years, the brand’s menswear business turned better, the destocking effect began to manifest, and the accrual ratio showed a decline.
From the perspective of changes in the price reduction reserve, the total amount of reversals / rewrites in 18 years2.
97 ppm (of which inventory products and consignment sales are 1 respectively.
880,000 yuan, 1.
03 billion), new accrual 2.
The inventory was downgraded earlier by the end of March 19.
40% to 8.
3.6 billion, zero inventory turnover investment.
67 is 0 compared to 18Q1.
2) Accounts receivable increased by 44 at the end of 18 over the beginning of the year.
77% to 4.
US $ 1.8 billion, part of which was the increase of credit for e-commerce at the end of the year, which was restarted at the beginning of 19, which was a one-time impact, and there was also an increase in support for franchisees.
Accounts receivable turnover rate was 9 in 18 years.
94, earlier 17 years 13.
Accounts receivable at the end of March 19 increased earlier.
29% to 4.
3.6 billion, accounts receivable turnover investment2.
22, 2 of the earlier 18Q1.
73 has an advantage.
3) Asset impairment losses have increased in value in ten years.
39% to 3.
19 trillion, most of which is the loss of inventory price loss2.
94 ppm (increased by 1 in ten years.
32%), the increase in bad debt losses increased (from -37.79 million yuan in 17 years to 18.94 million yuan in 18 years).
19Q1 Asset impairment losses + credit impairment losses totaled 35.29 million yuan, a decrease of 10 a year.
4) Investment income increased by 46 in 18 years.
77% to 1.
54 million US dollars, mainly due to the investment income contribution of wealth management products (correspondingly, supplementary income in financial expenses decreases every year).
1Q1 investment income + income from changes in fair value (investment income from wealth management products) totaled 28.86 million yuan, exceeding the value added 71.
5) Income tax expenses increased by 84 in the ten years of 2018.
77% to 1.
10,000 yuan, mainly due to the unrecognised deferred deferred assets and assets of the merger of some business companies.
19Q1 income tax expenses are downgraded by 16 each year.
6) Net cash flow from operating activities is downgraded by 53 each year in 2018.
18% to 3.
5.0 billion, of which 39 were cash inflows.
51 ppm, an increase of 8 in ten years.
49%, cash for 36.
4.6 billion, an increase of 21 previously.
The decrease in net injection was mainly due to the higher base of the five-year regular supplementary incremental interest limit received by the company in 2017, and the increase in operating expenses of new brands in 2018 and the payment of unpaid replacements and replacements.
In 1Q1, the net cash flow from operating activities increased by 201 in ten years.
69% to 70.59 million yuan.
We expect that branded menswear will continue to optimize the effectiveness and multi-brands to explore new growth points. We consider cash redundancy: 1) The company ‘s branded menswear business has destocked in the past few years and various reform measures are gradually effective. Financial indicators are reflected in the continuous rise in revenue and the overall performance.Growth contribution has increased, and at the same time, indicators such as inventory and accrual have improved.
From the perspective of the company’s operation-side reform measures, based on the accumulation of consumer influence of the seven wolves brand, the company promotes reforms in various aspects of products, channels, supply chains, brand building, channel-side reform of the distribution system, promotion of direct management, and cultivation of core retailThe company also promotes business cooperation, implements refined management at the supply chain end, and reforms the organizational system of the supply chain department to improve the efficiency and enthusiasm of back-office 苏州夜网论坛 departments. Various measures are conducive to stimulating the vitality of employees and franchisees, and promoting the sustainable and healthy development of the business.
2) In the long run, the company’s current multi-brand matrix is basically in shape. The main brand, Seven Wolf Men ‘s Wear, focuses on adjusting and improving efficiency, stimulating vitality. The new brand, 16N, targets young fashion brands, invests in KL to enter the light luxury field, and incubates Wolf Totem.Future growth points to build a fashion industry group.
At the same time, the conversion of new brands is gradually increasing, and the drag on performance will gradually change.
3) From the perspective of short-term performance, the overall consumption environment has been weak since 18 years. At the same time, under the influence of the high base of the industry in 19Q1 (the late Spring Festival in 18, the peak sales season overlaps with the cold winter and the favorable conditions have contributed to a higher base in 18Q1).Expected to be a low point of starting point, a series of stimulus policies will be implemented in Q2 and beyond, and the income growth rate is expected to be repaired to a certain extent.
4) The company’s monetary funds at the end of March 1914.
35 ppm + trading financial assets 28.
US $ 1.1 billion (mainly wealth management products), cash redundancy, can provide continuous investment income to support performance growth.
In addition, the company will continue to focus on the clothing industry and seek external investment and acquisition opportunities around the fashion consumer field. The project sources are distributed in many fields such as trendy clothing, outdoor sports, children’s clothing, and accessories.
Considering the weak sales in the first quarter, we lowered it by 19?
20 years, add 21 years of EPS to 0.
62 yuan, corresponding to 19 times PE15 times, PB0.
9 times, the estimated budget, cash assets are more defensive, maintain “Buy” rating.
Risk warning: weak terminal consumption, e-commerce and knitting business growth are less than expected, new brand cultivation is less than expected.