Semir Apparel (002563) Performance Express Review Comments: Fourth-Quarter Performance Under Pressure Under Industry Pressure

Semir Apparel (002563) Performance Express Review Comments: Fourth-Quarter Performance Under Pressure Under Industry Pressure

Event: Semir Apparel released the 2018 performance report, and the company achieved operating income of 157 in 2018.

160,000 yuan, an increase of 30 in ten years.

68%; operating profit and total profit increased by 32 respectively.

33%, 43.

92%; gradually realize net profit attributable to mother 16.

920,000 yuan, an increase of 48 in ten years.

74%; basic EPS is 0.

63 yuan, an annual increase of 50%.

In the fourth quarter, the operating income was 59.

51 ppm, an increase of 49 in ten years.

38%; net profit attributable to mother 4.

21 trillion, an increase of 234% in ten years.

Point of view: Acquiring brands and consolidating performance will increase endogenous growth.

The company completed the acquisition of French children’s clothing company Sofiza SAS in the fourth quarter and consolidated its fourth-quarter 2018 operating income.

Our preliminary estimate of Sofiza SAS ‘contribution to revenue in the fourth quarter was RMB 1.2-1.5 billion; in terms of net profit, the company’s M & A price was 1.

100 million euros, which is less than the net book value of the underlying company2.

800 million euros, after audit and evaluation, the 杭州桑拿网 amount included in the one-time investment income is about 1.

800 million yuan.

Excluding the consolidation factors: the company’s consolidated revenue growth rate was about 20%, the fourth quarter growth rate was 19%; profit growth rate was continuously above 30%, and the fourth quarter growth rate was above 80%.

We think the fourth quarter’s revenue and results are better than expected.

The provision for asset impairment is sufficient, and the company’s profitability has also improved significantly.

The company’s senior management accrued asset impairment losses6.

2.6 billion yuan (among which, in this year’s annual accrual amount, inventory depreciation reserve5.

6.5 billion yuan, provision for impairment of investment real estate2.

71 trillion, goodwill impairment provision 3,719.

760,000), the impairment provided more redundancy.

In 2018, with the help of the flexible supply chain, the sales volume was good, the inventory amount increased, but the age structure of the warehouse was more reasonable.

The company’s net profit margin was improved and net profit was achieved9.

46%, an increase of 1.

31%.

The Bala Balla brand is operating solidly, and the multi-brand children’s wear group has taken shape under the overlapping management.

The growth rate of China’s children’s clothing industry has continued to boom, and the industry’s concentration has also increased. The market share of the Barabara brand increased to 5 in 2018.

6%, the gap with the second place widened further.

Based on Bala’s solid foundation, the company’s other brands have begun to promote: after the company has obtained the TCP’s agency rights, the store has been opened successively; after the Kidiliz merger and acquisition, the Absorba brand will be introduced and promoted in China.

Absorba has achieved a certain market share and brand influence in Asia, and its subsequent release in the Chinese market is expected.

Through multi-brand operations, the company’s growth will be more sustainable and tense.

Conclusion: We believe that the company’s focus lies in: the continuous high R & D investment, product quality, style differences support; refined supply chain management, improve efficiency and profitability; successful brand clothing operation experience, future multi-brand development can be expected.
We expect the company to maintain double-digit growth in total in 2019 with the dual brands of Semir and Barra; entering 2020 will see more integration effects and performance may exceed expectations.We expect revenue growth in 2019 to be 31 in 2020.

23% (endogenous growth rate of 15%), 13.

58%, performance growth rate of 15.

81%, 17.

06%.

The PE in 2019 is only 14 times PE, giving a “strong recommendation” rating.

Risk warning: Consumption continues to be sluggish; integration is less than expected, and M & A targets continue.