Under The Economic Crisis, &Nbsp, BELLE Shoes Behind The Stock Hoarding Behind

BELLE

However, they are single and haggard, and their performance is mediocre, and their performance is difficult to match with their counterparts. In the past few weeks, the stock market is booming and its share price is obviously lagging behind.

But BELLE, as the shoe leader in the mainland, has gained two times profit from 05 to 07 years.

One reason for the decrease in profits is related to the company's 07 year special gain.

In the 07 year, BELLE recorded more than 500 million yuan of financing income, including a one-time 300 million yuan interest income from a listed freezing fund, and 08 years of financing income was only 72 million 250 thousand yuan.

Plus income tax expenditure increased by nearly 5 times over the 07 years, from 43 million 200 thousand yuan to nearly 260 million yuan, making profit greatly reduced, far less than sales performance.

In fact, BELLE's performance in the first half of 08 years has not been ideal, its turnover has risen by 6, and net profit has gone back, with a slight drop of 1.4% per year, which is also subject to tax expenditure.

In the 08 annual report, the company explained that its new Belle footwear (Shenzhen) Limited enjoyed free income tax in 06 and 07 years, and 9% in income tax from 08 to 10 years. As for the new merger, the income tax rate in the mainland is 25%, which can be expected that the company's tax expenditure will remain high.

In addition, BELLE also increased its expenditure last year. The two parts of sales and distribution expenses, general and administrative expenses recorded more than 6 growth. Sales and distribution expenses totaled 5 billion 680 million yuan, accounting for more than 3 of revenue.

Although the company is still profitable and able to expand over the past 08 years, the negative factors mentioned above, such as the continued high tax rate and the loss of profits, are still at a loss at the present stage. As far as the problem of rising costs is concerned, the management has indicated that the sports wear shops will not increase significantly in the 09 years, mainly because of the restructuring of the business, while the footwear industry will increase by 10% to 15% shops, that is, about 600 to 900, compared with that of the 08 years, the number of shops has increased by more than 4000, and the pace has obviously slowed down.

Inventory accounts for 4 of current assets.

In the 08 year BELLE expanded, the company's assets and liabilities increased, but its assets increased by about four points, and liabilities increased by more than doubled. Nevertheless, the current ratio still had 2.9:1, liabilities accounted for only 26% of shareholders' equity, and the financial situation seemed to be healthy.

However, looking at the content of current assets, it is found that the situation is abnormal.

BELLE's inventory increased nearly 08 times from 07 years to 2 billion 280 million yuan, to 4 billion 230 million yuan. Since the total amount of liquid assets has not changed significantly, the stock accounts for about 25% of the current assets, but the cash has been greatly reduced, from 5 billion 210 million yuan to 2 billion 330 million yuan.

It can be seen that BELLE's liquidity has actually dropped, and current liabilities have increased by more than 325 million times as a result of trade accounts, and even though the quick ratio is still 1.6:1, the liquidity is still qualified by this standard, but if the proportion of stocks in current assets continues to increase, it will be very disadvantageous to the company.

The sharp increase in BELLE's inventory is a matter of concern to the outside world. Stock hoarding is not only worrying about sales difficulties, but also may lead to gross profit if sales are needed.

In the 08 year, the average turnover period of BELLE was 138.1 days, which was higher than that of 121.8 years in 07 years.

Management explained that the increase in inventories was due to overestimated sales, but improved in the first quarter of this year.

However, the company has doubled its inventory in 07 years compared with 06 years. In fact, BELLE's main retail distribution business is different from other enterprises that only sell brand dealers, such as China's trend (03818) and Lining (02331). It is more prone to inventory problems, especially under poor economic conditions.

Words of big business

CICC: BELLE's profitability is hard to achieve

CIC's retail and branded apparel industry report points out that BELLE's sports business is facing huge inventory and discount pressure due to inventory problems of Adidas and Nike. It also believes that the company has slowed down the pace of expansion, and there has been no breakthroughs in the integration of new brands.

CICC pointed out that BELLE is expected to perform well under the sharp rebound in the consumer market. However, the current earnings ratio of 20 times has been overdrawn, and the optimistic expectation is given to BELLE's neutral rating.

The Credit Suisse report quoted BELLE management as saying that the first quarter of its sports business recorded a 6% decline in the same store sales, and a double digit decline in March and a negative growth in the first week of April.

The group closed 176 sports stores in the first quarter, of which 154 were second-line brands and 22 were first-line brands, and Credit Suisse was in line with the management reorganization plan.

As for footwear business, the same quarter growth was recorded in the first quarter, and only a low level in March. In the first quarter, 76 new stores were opened, with a growth rate of only 2%.

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Stock picking School: Shoe stocks are not the same.

Learning focus

1. BELLE is different from other shoe stocks, because most of them do not have distribution business, and inventory is difficult to solve.

2. BELLE is mainly engaged in retail business, though it is a domestic demand unit, and it is also sensitive to the business cycle.

As mentioned earlier, BELLE's inventory is higher than that of other sportswear companies which only sell brands but do not directly distribute them.

In recent years, many mainland sporting goods companies have shifted their focus to building brands and R & D products. Retail distribution is not the focus of the group and is handled by distributors.

With Anta (02020) as an example, the company still has nearly 2 per cent of its income from selling goods to personal customers and department stores in 06 years. But by the end of 06, the company has completely pformed and mainly focused on brand management and advertising marketing. In the past 07 years, the operating efficiency has been greatly improved, sales have risen 1.5 times and the profit has risen 3 times.

Another sports clothing company in China is mainly engaged in Kappa's brand business in the mainland, including leisure sportswear, although it will take into account the management of distribution channels, but the distribution network is outsourced to other companies.

Distributor inventory is difficult

BELLE operates retail distribution. BELLE operates several brands of retail businesses, including front-line sports brands Adidas and Nike, second-line brand PUMA, Converse and so on. Footwear covers most women's shoes, such as private brand Staccato, Joy & Peace, agency brand Bata, BCBG, Clarks and so on.

BELLE is in the downstream of the industrial chain, and its flexibility is relatively low. Once the sales situation is not ideal, the stock will be hoarded immediately, and the cost will increase immediately. This is the pressure which the upstream enterprises of pure brand agency are facing less.

Because of the trend of China, a company like Lining had already held orders before several seasons ago, and the economic impact may not be immediately reflected or lagged behind.

Moreover, stores are more sensitive to the economic cycle and less consumption, and the distributors are the first to bear the brunt.

Therefore, although the domestic demand unit is facing the "epidemic prevention capability" of the economic downturn, the pressure on BELLE is also higher than that of other near shares. However, it is not just because BELLE is the leading enterprise, it blindly hopes for a better economy. Moreover, from the conservative management of the management and the poor performance of the first quarter, the mainland economy is not necessarily the ideal one.

Ratio analysis

Looking at BELLE's inventory figures, the average annual inventory turnover period is 138.1 days in the annual report. The average inventory turnover period is as follows:

(average stock size, cost of goods sold) * 365

From this, we can figure out how long the company's stock will be sold. The higher the figure, the worse the sales situation. The average stock turnover period of BELLE is increasing over the past 07 years.

Looking back on the trend of China, the average turnover period of 08 years is 42 days, which is very different from BELLE.

In addition to the average inventory turnover period, reference can also be made to the accounts receivable to understand the company's financial position. The average receivable turnover period formula is as follows:

(average trade receivables, revenue) * 365

From this, we can calculate the time required for the company to collect trade accounts. In the BELLE performance report, we also mentioned that the average turnover period of receivables was 33.4 days.