Seven Wolves Push The Six Major Product Lines To Scale Up Gradually.

In 2009, the green label was 87.24% and the blue mark was 6.54%.

The blue label (positioning young) will be the third pole of growth, mainly because the seven wolves have been giving people the impression that they are mature. Therefore, the company has attracted more young consumers through the launch of the blue label. It has opened 115 stores in 2009, and has been separated from the previous brands. The general manager of Zhou Shaoming is responsible for the Department. The saint worth brand is mainly the brand and grade of the company; the sales of children's clothing are generally in line with the living hall; the women's wear is higher than the children's clothing, and the shop will open separately; the company will also launch the purple label, which will take the lead in the shopping mall.

The company will focus on the optimization of distributors' management and the steady expansion of direct outlets to promote the integration of the company's sales channels.

The company set up six large areas and 11 subsidiaries, which is responsible for the expansion of the local area's control and direct operation system, and the establishment of a customer representative (Regional Manager) system to strengthen the service and information pmission to agents.

A customer representative manages 30 stores to supervise whether POSE can go online, so it also increases management fees.

The company has 3249 terminal outlets, an increase of 480 over the same period (an increase of 17.33% over the same period), maintaining a steady pace of expansion.

The company will continue to implement the strategy of reducing extension and expansion in the future. The key is to integrate channels (Bian Pinghua), increase product categories and enhance efficiency; in terms of channel form, the seven wolves are weaker in department stores (formerly strong stores), so in the future, they will focus on developing new business forms such as department stores, ShopingMall and supermarkets.

In 2009, the company reorganized the network sales market, launched the flagship store, and implemented double line walking, using its own website and Taobao online shopping mall respectively.

There is not much difference between the network and the physical store, the product price is the same, but because the space is not restricted, the display products are more abundant.

Internet sales are long term and short term contribution. In 2009, Internet sales are about 3 million yuan, and sales may exceed 10 million yuan in 2010. Large life hall will bring confidence and direction to agents, and provide trial sites for online sales. Therefore, in theory, physical stores and network sales are well integrated.

Later, we should test the improvement and extension of management ability.

We expect that in 2010, the company will add 200 direct stores and 350 franchisees, with a growth rate of about 17%.

We believe that the number of terminal companies exceeds 3000, the scale effect is gradually reflected, the cost rate will decrease, and the net profit margin will increase.

The ERP system has upgraded the ERP system of the management company to 5 modules. At present, 3 systems have been built.

It is estimated that all of them will be completed in 2011.

The company will force agents to join the system.

But there will be no 100% coverage of agents.

The gradual implementation of each module of the ERP system will effectively enhance the management efficiency of the company and effectively enhance the rapid response of the supply chain.

Maintain "buy" rating.

We believe that with the breakthrough of 3000 channels, the scale effect will continue to appear, the three cost rates in the future will gradually fall down, further enhance the level of profitability. The continuous optimization of channels will gradually recommend flat management, which will also enhance the overall management level and bring about the improvement of net profit margin. The ERP system will enhance the rapid response capability.

Taking all these factors into consideration, we will continue to look forward to the development trend of the seven wolves.

Maintaining 2010-2011 years earnings per share 0.94-1.24 yuan forecast, 2010 PE is 31.12 times, valuation in the market is expensive, but taking into account the company's sound operation and good development trend, we think the seven wolves can be regarded as a steady investment variety, maintain "buy" rating.

Risk factors.

Channel optimization and integration, especially the uncertainty of the integration process of franchising channels.