Semir Apparel (002563): Release frequency adjustment and decrease in KIDILIZ cause revenue and profit growth to exceed expectations

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Semir Apparel (002563): Release frequency adjustment and decrease in KIDILIZ cause revenue and profit growth to exceed expectations

The 3Q19 results were slightly lower than our expected company’s 3Q19 results: 132 in the first three quarters.

60,000 yuan, an increase of 35 in ten years.

8%; net profit attributable to mother 13.

1 ppm, a ten-year increase of 2.


Revenue in the third quarter of 19 was 50.

40,000 yuan, an increase of 19 in ten years.

1%; net profit attributable to mother 5.

9 ‰, a decrease of 3 per year.

2%, corresponding to a profit of 0.

22 yuan.

The performance was slightly lower than our expectation, as the company’s adjustment of the issue frequency affects revenue growth and the acquisition of Kidiliz may affect.

Revenue growth was mainly contributed by Kidiliz’s consolidation. The original main business was e-commerce. Children’s clothing showed a good growth momentum and adult clothing products.

In the third quarter of 19, the company’s revenue increased by 19%. If Kidiliz was 成都桑拿网 not consolidated, the original main business achieved low single-digit growth: online business and children’s clothing business had ideal substitutions, increasing by about 30% and 10-15% respectively; adult clothing revenue substitution (online(Increasing 15-20%, offline launch is about 10%), mainly due to the company’s rapid delivery frequency reduced shipments, but a small number of multiple shipments frequency can optimize inventory management and cash back.

Channels continued to adjust, and children’s clothing opened stores to intervene.

The company continued to close inefficient stores, street stores, and newly opened large stores such as shopping malls.

As of 3Q19, the total number of stores in the company’s territory was 9,582, a net increase of 459 from the earlier period, of which 5,682 were children’s clothing, 3淡水桑拿网,900 were adult clothing, and 389 and 70 were net opened earlier.

The pace of children’s clothing store opening reflects the confidence of franchisees in the future development; adult clothing this year is mainly to digest the opening of stores last year to improve efficiency.

High selling expense ratio dragged down profits.

Driven by Kidiliz’s consolidation of higher gross profit margins and e-commerce, the rapid growth of children’s clothing business, the company’s gross profit margin increased in the third quarter of 1919.

2ppt; At the same time, new business promotion brought breakthrough advertising investment, e-commerce platform costs increased, 3Q19 sales and management expense ratio increased by 9.

6ppt, net interest rate decreased by 2.

7ppt to 11.


Inventories, receivables turned well, and the quality of income improved.

As of 3Q19, the company’s book inventory was US $ 5.3 billion. After removing Kidiliz’s consolidated inventory of US $ 800-900 million, the original main inventory increased by only one unit. Accounts receivable increased by 17% earlier, all lower than the revenue growth rate, and the working capital turnover was healthy3Q19 operating cash flow increased 246% to 1 per year.

300 million.

Development Trend According to the company’s second-stage income stock incentive plan, the corresponding target of the company’s performance assessment for the current year is the increase of net profit growth that is not attributed to its mother.


Earnings forecasts and projections Due to uncertainties in the Kidiliz business and adjustments in the adult apparel business, the earnings forecasts for 2019 and 2020 are lowered.

1% and 9.

9% to 0.

67 yuan and 0.

78 yuan, corresponding to an annual increase of 7.

5% and 16.

1%, the company currently corresponds to 16 in 2019/2020.

9 times / 14.

6 times price-earnings ratio.Maintaining Outperform rating, we are still optimistic about the company’s children’s wear and e-commerce business development prospects, but due to adjusted earnings forecasts and estimated conversions, we lower our target price by 4.

0% to 14.

10 yuan, corresponding to 18 times the 2020 price-earnings ratio, implying 23.

7% upside.

The risk inventory is high in risk, and the merger and acquisition integration is lower than expected risk.