BELLE Will Continue To Expand Its Distribution Network In The Third Quarter To Occupy The Two Or Three Line Market.

November 1st, BELLE In the third quarter of 2010, the same store sales growth in the international market increased by 18% over the same period last year, which is in line with the trend in the first half of the year. It is expected that the same store sales growth will exceed the 15% annual growth expected by the senior management of the whole year. As the average price increase will help offset the rising pressure on raw materials and labour costs, we believe that the gross margin will remain at 55.6% level in the first half of 2010. The company developed it on its own. brand Accounting for 91% of footwear sales in the first half of 2010, it will continue to become the main source of revenue in the short term. At the same time, due to the integration of sales and R & D, the contribution of newly acquired brands such as Senda and Basto will continue to increase in the second half.

By the end of the first half of 2010, 80% of the footwear stores in Bai Li were located in the two or three line city. We believe that the company will continue to focus on expanding outlets in less permeable cities, especially the mature brands represented by BELLE brand. Benefiting from China's increasing growth potential in urbanization and the three and below markets, this strategy will accelerate the growth of footwear business. BELLE continued to expand its distribution in the third quarter of 2010. network The number of shops increased to 7762, a 591 increase over the first half of the year.

After streamlining poorly performing stores last year, the company continued to expand its sports apparel business this year. The number of shops increased by 211 in the quarter, and at the end of the third quarter of 2010, the total number of shops was 3356. In the third quarter, BELLE's sportswear sales in the same store increased by 3%, down from 4% in the second quarter, meaning that the figure for 2010 will be in the middle.

The 6 billion 200 million brand has advantages.

The group's financial position is still robust. By the end of the first half of 2010, BELLE had held 6 billion 196 million yuan in cash, an increase of 7% compared with half a year ago. Looking ahead, the company will expand the number of existing core footwear brands and top sports apparel brands such as BELLE brand and focus on the two or three line market.

BELLE has a high reputation and has a leading position in the industry. Its retail network is all over the country, plus multi brand strategy, which should ensure the competitiveness of the company and keep it in the leading position in the mainland market. Therefore, we believe that its valuation should have a premium over the industry average. The company acquired Mei Bao in 2008. It is expected that the two will be further integrated, which should increase the company's synergy and improve its overall business performance. We bought the stock rating and raised the target price to 15.63 yuan, equivalent to 27.5 times the expected price earnings ratio in 2011, or 1 times the earnings growth rate calculated at the compound annual growth rate of 28% of the estimated earnings per share in 2009-11.