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Seven Wolves: Speeding Up The Construction Of Marketing Network

2008/7/18 16:28:00 19

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Seven wolves (002029, closing price of 17.67 yuan) amended the interim results announcement, and the results exceeded expectations again.

It is expected that the net profit attributable to the owner of the parent company in the middle of 2008 is 29 million 368 thousand yuan, increasing 150%~200% over the same period of the previous year, raising the increase by about 50%. After the first quarter, a satisfactory achievement was created again.

There are two main reasons for the performance exceeding expectations: first, the sales of orders in the summer are ahead of schedule, and sales revenue and net profit increase correspondingly.

Due to the early shipment of some summer clothing in the first quarter, and then the two quarter of the summer sales orders were issued ahead of schedule, the sales growth increased. It is estimated that the Chinese newspaper company will achieve a net profit of 86 million yuan, an increase of about 196% over the same period.

The net profit achieved by the company in the first half of the year accounted for about 40% of the total annual share (42% in the first half of 2006 and 32% in 2007). The proportion of net profit realized in the first half of this year will be greatly improved due to early shipment this year.

We expect growth in the first half of this year to be higher than in the second half.

Excluding this part of the revenue, the company's sales revenue is expected to increase by more than 100%.

Two, the company vigorously promotes the project of raising funds --- the construction of the national sales network upgrading project, and the addition of more sales outlets.

It is understood that in October 2007, the issuance of new projects is progressing smoothly, and the opening rate is faster than we expected.

According to the additional scheme, the company expects to add 820 new stores, thus initially forming a multi level and multi-functional clothing sales terminal network with 800 square meters of seven wolf wolf men's living hall, 300~800 square meters of seven wolf wolf flagship stores and 300 square meters of seven wolves.

By the end of 2007, the company had completed 4 living houses (Changzhou, Xi'an, Mianyang, Karamay) and nearly 200 franchised stores. This year, the speed of opening shops has accelerated significantly, striving to complete more than 500 stores in the year.

The company has shown the importance of marketing network construction with actual actions. We expect that the new store ratio will be 30% in 2008.

Therefore, we still maintain "strong buy" investment rating.