Business Casual Men'S Wear Three "Faucet" Still Has Potential

In the first half of the year, seven wolves (002029) achieved operating income of 1 billion 194 million yuan, an increase of 22.64% over the same period last year, operating profit of 217 million 970 thousand yuan, an increase of 28.72% over the same period last year, and net profit of 174 million 890 thousand yuan, an increase of 41.29% over the same period last year.

The main business income of clothing was 1 billion 86 million 200 thousand yuan, an increase of 17.94% over the previous year, the main business cost was 630 million yuan, an increase of 19.06% over the previous year, and the main business profit margin was 41.99%, a decrease of 0.54 percentage points over the previous year. In addition to North China and Northwest China, sales in other regions showed a certain growth and sales situation was good; North and northwest markets. Terminal operation Pressure is greater, sales expansion slowed down.

In the first half of the year, the company promptly grasped the timing of the positive fashion trend return and leisure wear industry structure adjustment, combined with the expansion of Direct stores, and entered the field of high added value Western-style clothes and shirts. The income of T-shirts and jackets of the company's fist products increased by 13%, while Western-style clothes and shirts increased by 36% and 35% respectively, thus effectively driving the overall clothing revenue up by 17.94%.

In the first half of the year, management fees increased by 52.70% over the same period last year. First, the company increased the stock option cost by the option incentive scheme; two, the staffing increased, the market salary level increased, the manpower cost increased substantially compared with the same period last year; three, the research and development cost increased more than the same period last year; four, the scale expanded further, the management cost generally rose, and the rental cost increased. {page_break}

　 Network sales increased by 400% over the same period as a new profit growth point.

In the first half of the year, the seven franchises operated by franchisers based on distributors and agents still contributed more than 70% of the company's main business revenue. The dealer team is stable, relying on the warm consumer market and the effective digestion before inventory, so as to achieve the recovery of sales revenue. The company implements the management target of "management and service sink", and the service will sink from the agent to the distributor. The direct confirmation of the return point, the granting of credit granting, and the dealer service measures established at the beginning of this year are further implemented and followed up.

During the reporting period, the number of Direct stores increased by 51. As of June 30th, the number of terminal channels was 3576, of which 439 were direct terminals.

It is worth noting that the first half of the new channel has been progressing smoothly. In the first half of the year, the company achieved a net sales of about 32 million yuan, an increase of 400% over the same period last year, accounting for 1.57% of its revenue. With the successful completion of the technology platform, the new network sales platform of inventory sales, new product sales and exclusive product sales will be launched in the second half of the year. Management believes that the rapid growth of Internet sales can contribute positively to the growth of net profit in the future.

Guo Jin Securities researcher Zhang Bin pointed out that the company's channel construction speed has steadily increased. In the face of rising rent and increased competition, we have intensified our efforts to channel support. From the past we only focused on agents to more direct support dealers, making the income growth in the first half of this year reached 22.64%, which was significantly higher than that of 10.6% in the past year. We believe that the joint development of brand dealers and channels will become the mainstream in the future. The strategic adjustment of the company will directly increase the future revenue and net profit growth.

　　 Transformation from "wholesale" to "retail" mode

In the first half of the year, the seven wolves devoted themselves to the adjustment of the internal management mode and steadily completed the transformation from "wholesale" to "retail".

In order to realize the transformation from "wholesale" to "retail", the company focuses on the rectification of terminal stores, including terminal decoration, salesperson service, product display, promotion policy and other series of terminal marketing programs, and has achieved good results. During the reporting period, the contribution of the company's series of products to sales revenue remained at the same level as last year. The red, green and black products still contributed about 90% of the main business income during the reporting period.

The company has successfully completed the establishment of the business team, and the retail oriented internal process adjustment has been initially integrated. The smooth running of the corresponding team will lay the foundation for the strategic transformation of the company. The company's "commodity planning" was further strengthened. Merchandise planning, planning, product design, product ordering, brand marketing, and product satisfaction. According to the 2011 autumn and winter ordering meeting held during the reporting period, the company's ability of commodity planning has been increasing, and commodity planning has further strengthened the ordering guidance. With the further improvement of the company's commodity planning ability, the increase of hit rate will bring a positive impact on the improvement of terminal efficiency.

Guo Jin Securities researcher Zhang Bin pointed out that the brand operation of the seven wolves is becoming more and more mature, and the upgrading of the brand connotation and meticulous management are the key to the subsequent performance improvement. It is optimistic about the transformation prospect of the company from "wholesale" to "retail", especially the steady promotion of reducing the risk of transformation. In addition, the company's measures to strengthen channel construction will also directly enhance the performance. For such excellent enterprises, we have always recommended the investment strategy of "buying" and holding.

　 Nakakoku Toshiro: net profit increased by 63.1%

In the first half of the year, another leading brand of Fujian business casual men's wear and 01234.HK of Hong Kong shares were brilliant. They were selected as "the ten largest Hong Kong stock institutions to select stocks".

During the reporting period, the company's operating income was 1 billion 32 million yuan, an increase of 31.2% over the same period, the average sales price increased by 13.2% to 163 yuan, gross profit increased by 37.7% to 376 million yuan, gross margin increased 1.7 percentage points to 36.4%, and net profit increased 63.1% to 228 million yuan. By the end of June, the average number of days of inventory turnover fell to 49 days from the 53 day of the end of last year, and the number of accounts receivable turnover days decreased from 71 to 70 days, and the turnover days of trade payables increased from 81 to 96 days.

　　 L2 net loss is about 5 million 400 thousand. It still takes time to break even.

Although the company's main brand "Le Lang" turnover and profits have increased by more than 30% over the same period, the performance is brilliant, but the sub brand L2 lost a net loss of about 5 million 400 thousand yuan in the first half of this year, and star Daniel Wu also stopped endorsing the "L2" brand.

The company launched L2 products to the market in July last year. The average selling price of spring and summer products is about 25% lower than that of "Li Lang". In the first half of this year, the turnover of L2 was 35 million 600 thousand yuan, accounting for 3.4% of the total turnover in China, eliminating all costs and making a net loss of about 5 million 400 thousand yuan.

However, as a secondary and even younger and fashionable sub card, L2's future development still has great potential. China revealed that the total orders for L2 increased by 135% in the autumn and winter order meeting held in January and April this year. In 2012, the L2 orders increased by 1 times in the spring and summer.

By the end of June this year, L2 had 137 stores. China said that in the second half of this year, it will continue to optimize and strengthen the development of L2 brand, and the annual target of opening stores has increased to 150-200 on the basis of the current quantity, hoping that the L2 brand will achieve the goal of annual revenue and expenditure balance. {page_break}

　　 "Le Lang" brand still has great room for expansion.

In the first half of the year, the company's performance was strong, especially in the northwest region, which increased by 48.7% annually, and the company successfully developed the Midwest market. The company's main brand, "Li Lang", orders for the autumn and winter orders in 2011 will increase by 28% and 34% annually, and the price of products will also increase by double digits. In 2012, the order will be gratifying in spring and summer. The total amount of orders will increase by 28.5% over the same period last year, and the average selling price and sales volume will reach double-digit growth.

In terms of sales channel management, the company hopes to achieve real-time online updates of all retail stores' sales and inventory records by the end of 2012, so as to better grasp changes in consumer demand. By the end of the first half of 2011, all L2 brand stores and 700 Li Lang stores had been online connected, with the goal of covering the system network to 900 stores.

Guo Yuan Hongkong gave the Chinese Le Lang a "buy" rating to maintain its target price of HK $12.91. It pointed out that the company's profitability in the first half of this year has improved significantly, which is related to the company's improvement in product mix, the increase in product prices and the simplification of industrial chain control costs, as well as product innovation, brand awareness and product upgrading. At present, the development space of "Li Lang" brand stores is still very large, especially in the northwest region. The main brand "Le Lang" has increased by 83 shops, with the total number of stores reaching 2888. The company plans to open 200-250 stores in 2011 and 20 flagship stores. The company pays attention to the collection and statistics of market information.

　 Nine herding Wang: two or three line cities speed up development

In the first half of the year, 9 Mu Wang (601566) achieved operating income of 963 million 740 thousand yuan, an increase of 31.02% over the same period, and the net profit attributable to shareholders of listed companies was 235 million 340 thousand yuan, an increase of 42.39% over the same period last year.

The main business of the company is the sales of clothing sales. The main business income increased by 31.34% in the 1-6 months compared with the same period last year. The main reason is that the company has stepped up the construction of the marketing channel, and the sales terminal has reached 2867 at the end of 6, an increase of 365 over the same period last year. Two, the product structure is reasonable. At the same time, with the improvement of brand influence and terminal operation management ability, the average single store performance has been promoted.

　　 Shirts and jackets increased significantly.

From the perspective of income structure, men's trousers account for the highest proportion, and male trousers account for 54.04% of the company's main business income, up 22.23% over the same period last year. Men's trousers have always been their core products and have high popularity and reputation in the industry. The market share has been ranked first in the country for 11 consecutive years.

Under the leadership of men's trousers, sales revenue of the company's series of products has been continuously breakthroughs, sales of shirt sales have increased by 96.98% over the same period, the increase is ranked first, jacket income increased by 58.25% year-on-year, T-shirt income increased by 12.03% compared with the same period, while other categories of income increased by 23.35% over the same period last year.

Shi Hongmei, an Orient Securities researcher, points out that the sales revenue of the company's accessories and accessories is only 47%, which is far below the 70-80% level of the industry. Therefore, the development of the upper garment has a very large space. The development of the upper garment will further enrich the product category of the company and drive the sales growth to degenerate. At the same time, the higher gross margin of some products is expected to push up the gross profit margin of the company in the future. The composite profit growth rate is expected to be 30% in the next three years.

　　 Two or three line market store expansion significantly accelerated

In the prospectus before, nine Mu Wang indicated that the fund-raising fund would be invested in 4 projects, namely, marketing network construction, supply chain system optimization and upgrading, information system upgrading and design research and development center. As of June 30th, the total investment of the company's total investment projects was 303 million 400 thousand yuan, all of which were expenditures for marketing network construction projects. According to the plan, the company's marketing network construction project is expected to invest 1 billion 319 million 900 thousand yuan, and the amount currently invested is 23% of the total investment.

In the second half of the year, the company will continue to increase the channel construction and expansion, improve the layout of marketing network, continue to enhance the two or three level urban expansion while consolidating the first tier cities, continuously enhance the operation efficiency of the shops, strengthen the terminal operation and management capabilities, carry out the standardization construction of the retail operation system, strengthen the company's commodity design and R & D capabilities, and establish the leading position of commodities, such as the differentiation of raw materials, the diversification of the version and the internationalization of design, improve the fast response supply chain system, optimize the supply chain management, enhance the quick response capability of the supply chain, and strengthen the management and organizational development of the company.

Everbright Securities analyst Li Jie pointed out that in the first half of the year, the company's terminal expansion significantly accelerated, the store increased by 157 compared to the end of 2010, of which 27 outlets increased by 130, and most new stores were distributed in two or three line cities. The Future Ltd will increase market development in the southwest, northwest and Northeast China and increase its market share. It is estimated that in the next three years, the composite growth rate of corporate net profit will reach 30%.

Shi Hongmei pointed out that at present, the coverage rate of the company's two or three and below cities is only 80% and 40%, and the coverage density is also low. Assuming that the future will reach full coverage, the coverage density of the second tier cities is 5, and the three line and the following are 2. In addition, the company's channel mode is relatively flat, which is different from other Fujian clothing brand enterprises, and also provides greater flexibility and initiative for its channel expansion. It is estimated that the number of net shops will be around 350-400 in the next three years, and the shop area is expected to increase gradually. The rapid expansion of the number of channels and the growth of the average area of the channel will jointly promote the growth of the company's operating income.