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Peacebird (603877): Channels continue to adjust Q2 revenue slightly improved QoQ

Peacebird (603877): Channels continue to adjust Q2 revenue slightly improved QoQ

Investment Highlights The company released its 2019 Interim Report, which effectively achieved revenue 31.

2 billion (-1.

54%), realizing attribution / deduction of non-net profit1.

32/0.

25 trillion, -33 each year.

06% /-66.

87%.

In 19Q2, it achieved revenue of 14 in a single quarter.

610,000 yuan, +2 for ten years.

03%, a growth rate of 19Q1 + 6.

49PCTs, terminal sales improved month-on-month.

Sub-brands: Women’s & children’s clothing gross margin increased, Rakucho performed strongly, and men’s clothing sales were under pressure.

① Women’s clothing achieves revenue 11.

02 trillion, affected by the decline in the scale of handling old goods and the increase in the discount rate of direct sales, the growth rate was -2.

56%.

However, due to the decrease in cost, the gross profit margin increased by +6.

06PCT to 60.

67%.

② Rakucho increased the layout of direct sales and online channels, which led to the increase in revenue and gross profit margin, of which revenue increased by +12.

37% to 4.

18 ppm, gross margin increased by 1.

65PCT to 51.

86%.

③ The proportion of sales of men’s clothing outlets increased, and the handling of old goods was increased, so the revenue was ten years.

83% to 10.

84 ppm, meanwhile, gross profit margin is affected by the reduction of direct sales discount rate, at least -3.

14PCT to 58.

60%.

④ Children’s clothing is similar to women’s clothing. The inventory processing scale and cost have dropped significantly, so the series revenue is three years.

68% to 3.

66ppm, gross profit margin +4.

53PCT to 56.

35%.

Judging from comparable same-store data, children’s clothing Q2 changed from negative to positive, achieving single-digit growth (Q1: multiple single-digit shifts).

Sub-channels: The offline structure continues to be optimized, and shopping centers have become the largest channel; the proportion of new online products has increased, maintaining rapid growth.

The company’s online / offline income is +8 each year.

30% /-4.

63% to 8.95/21.

8.2 billion, accounting for 29 of total revenue.

09% / 70.

91%.

Specifically: ① Online income accounts for +2 in two years.

55 PCTs, GMV achieved 20% + 武汉夜生活网 growth, thanks to the company’s continued increase in the proportion of new counter products, and the development of new social e-commerce channels, reaching consumers across the network.

② Continuously optimize offline channel layout, with shopping malls accounting for the largest proportion of revenue.

As of 2019H1, the retail sales of shopping malls / department stores / street stores / olly stores were 16.
.

96/15.

12/7.

03/1.

8 billion, accounting for 33.

24% / 29.

63% / 13.

79% / 3.

52%, accounting for +3 respectively at the end of 2018.

13 / -1.

31 / -1.

40 / + 0.

83PCTs.

Among them, the proportion of shopping malls exceeded that of department stores for the first time. At the same time, the number of stores (including Ole) exceeded 1750, becoming the largest offline channel.

Closing inefficient franchise stores increased gross margin levels, while net profit margins improved due to the impact of selling expenses.

The company’s gross profit margin is 57.

06% for one year.

29PCTs, mainly due to the company’s net clearance of 232 franchise stores with a reduced gross profit margin (gross profit margin 49).

15%), and opened 73 direct-operated stores with a higher gross profit margin (gross profit margin 67).

49%), so the revenue from direct sales increased by 5 compared to 18H1.

98% to 70.

75%, driving the company’s overall gross profit margin to increase.

At the same time, the number of directly-operated stores increased, as well as the increase in brand marketing expenses and the sales expense ratio +5.

02PCT to 42.

92%.

Management expense ratio -0.

94PCT to 6.

95% benefited from the company’s strengthening of expense control and unrecognized equity incentive expenses in the current period.

In addition, new government grants of 47.4 million yuan were added to other income in this period, and the external income of the hedge business decreased significantly (-43.7 million yuan). Looking at the company’s net interest rate -1.

96PCT to 4.

10%.

The overall operating efficiency is stable, and cash flow is improved from the previous quarter.
Inventory measurement was -7 at the end of 2018.
73% to 16.

USD 9.4 billion, effective control of the scale, and the gradual advancement of the TOC of the transfer company, both the terminal sales rate and discount rate increased by 1?
2PCTs.

Accounts receivable turnover days were multiple and stable, surpassing 4 days to 27 days.

Cash flow improved significantly from the previous quarter. Net operating cash flow in Q2 was -0.

24 ppm, but improved from Q1 and increased by 2.

4.7 billion.

Profit forecast and investment advice.

Considering the company’s comprehensive multi-brand and multi-category layout, maintaining rapid growth online, and continuously optimizing the channel layout offline to improve the operating efficiency and profitability of directly operated stores and franchisees, while deepening the TOC reform and enhancing the overall supply chain efficiency.

With a low base of 18H2, the net profit for 2019/20/21 is expected to be 6, respectively.

25/6.

95/7.

8.4 billion, an increase of 9 respectively.

31% / 11.

26% / 12.

82%, corresponding EPS is 1.

30/1.

45/1.

63 yuan, the current price corresponding to PE is 11/10/9 times, maintaining the “overweight” level.

Risk warning: weak consumption, sales expectations exceed expectations; store expansion is not as fast as expected.