Leisure Wear Industry Consumption Growth Fell &Nbsp; Children'S Wear Grew Strongly.

As the two leading companies in the domestic casual wear industry, the US and Semir's every move has become the "weathervane" for the development of the whole industry.

Judging from the operation of the two enterprises in 2011, there are several trends. First, the domestic youth casual wear market has experienced rapid growth. At present, the impact of international fast fashion brands such as Zara, H&M, Uniqlo and so on is becoming more and more intense. The overall growth rate is slowing down. Last year, the inventory pressure was stronger and entered a stable adjustment period.

Two, under the adjustment trend of leisure wear business, it is inevitable to seek new growth points. Children's clothing has become a "meat and cake". Semir and Smith Barney are currently accelerating the development of children's clothing business.

Three, the extension, enrichment and fine adjustment of the product line are becoming more and more important. The United States continues to refine and enrich the brand series, and Semir continues to enhance the product's fashion and so on.

US bond: revenue 9 billion 945 million better stock index

A second line direct run to drive three or four line franchisees

Current company

Huatai Securities researcher Gao Guo pointed out that after the continuous adjustment of the previous business strategy, the United States barrack shop started to slow down, focusing on the cultivation of existing direct stores. During the period, the effective control of cost played a significant role in the growth of net profit.

Its main outlets are mainly concentrated in the first tier core market, and the franchised stores are concentrated in the 234 line market. Currently, the number of Direct stores is nearly 20%.

As part of the adjustment of the channel strategy in 2010, the support for franchising channels increased, and the franchising business resumed rapidly. The first half of 2011 increased by 54.5% year-on-year, which was higher than that of the direct revenue growth.

Future Ltd will meet the needs of differentiated channels through products and brands, and dig deeper into the market space.

Huatai joint researcher Cheng Yuan, Zhang Lei and Feng Jing predict that the expansion speed of their channels will be stabilized at around 20% in the future.

Memory volume is expected to fall to a reasonable level.

During the reporting period, Smith Barney continued to increase product and brand innovation, continuously deepen product category and thematic operation, enhance brand image, enhance the terminal competitiveness of the company, and achieve rapid growth in direct channel and affiliate channel sales, while inventory regulation shows a more obvious downward trend.

Huatai Securities researcher Gao pointed out that in the first three quarters of 2011, the inventory was about 2 billion 980 million yuan, and the excessive inventory had a certain relationship with the company's sales scale and the proportion of direct battalion.

At present, we are actively integrating various promotional methods, such as new and old "integration" sales, 2000-3000 discount shop sales, and electronic channel sales.

At present, the stock index is gradually improving, and the inventory is expected to gradually decline. It is estimated that the current inventory is about 2 billion 500 million yuan, of which the goods accounted for about 60%-70% in 2011.

Huatai joint researcher Cheng Yuan, Zhang Lei and Feng Jing pointed out that the U.S. stock inventory has a good digestion trend. In the future, we will improve operational efficiency from products, stores and logistics, and reduce the backlog of goods from the source.

Through the opening of special stores, new and old products integration, and so on, the inventory has been gradually effective. It is estimated that the inventory will reach 2 billion 500 million yuan by the end of 2011, and the inventory will drop to a more reasonable level by the middle of 2012.

In order to avoid the backlog of inventory and promote new product sales, the company put together the product mix with the store type in the commodity planning section last year when preparing the autumn order meeting, and plans to add efficient logistics to the new product launch this year, so as to realize the weekly listing of new products and speed up the turnover of terminal goods, thereby improving the performance and reducing the backlog of inventory.

At present, the company has begun to try every week to launch new products, and the turnover rate of goods in stores has increased correspondingly, and the product price rate has also increased.

Galaxy Securities researcher Ma Li and Li Jiajia pointed out that the company increased its inventory clearance efforts in the second half of 2011. It is estimated that there will be about 300 new discount channels throughout the year. The total inventory is expected to be around 2 billion 500 million -26 billion yuan (including containers, packaging materials, etc.).

As the company's stock is mainly formed in the autumn and winter of 2010 and the spring and summer of 2011, it is expected that the inventory will be cleaned up in the first half of 2012, and the pattern of quarterly inventory and cash flow improvement will continue. The overall financial statements of the company will be clearer in 2012.

MC flat effect fast growth, Tagline and children's wear continue to advance.

After nearly two years of adjustment and development, the brand line and product line of Mei Bang are relatively abundant. Apart from the main brands MB and MC, MB has derived MooMoo, Tagline and other sub brands, and its product lines are divided into MTEE, MJeans, M.Polar and other series.

The Tagline series launched in 2011 is an extension of MB brand positioning, with a wider audience and a wider price band.

At present, it is mainly promoted in the first tier cities, and is rarely sold in separate stores. The future expansion of the channels will be based on the newly developed shopping malls and community stores in the second tier cities.

Huatai joint researcher Cheng Yuan, Zhang Lei, Feng Jing pointed out that in 2011, its MC growth rate was faster than MB, and brand operation continued to improve. The MC loss is expected to be slightly higher than 50 million yuan this year, and the level of Ping MB is still a little higher than that of MB.

The poor performance of MC is mainly related to the fast speed of opening shop, but with the continuous improvement of product development, display of goods and supply chain management, MC business efficiency has been continuously improved.

The new series of Tagline jumped out of the original frame of the United States and positioned itself in a wider audience.

EPS is expected to be 1.21, 1.58, and 2.08 yuan in 2011-2013 years, respectively, to maintain the "buy" rating.

Huatai Securities researcher Gao pointed out that the company's products in recent years are becoming mature.

By the end of 2011, the brand of MB urban fashion series was upgraded, and Tagline was focused on publicity. In the future, independent brands would operate and set up independent stores.

In 2012, the new MB children's wear brand MooMoo is expected to make rapid progress through the huge sales network of Mei Bang adult wear.

MC through the store adjustment, the single store efficiency improvement is more obvious, will continue to promote MC-Kids children's wear to join, Future Ltd MC adult wear brand will also gradually open to join in business, in 2012, MC brand is expected to turn a profit.

The main driving force for the future development of the company is the growth of new brands, the extension of channels and the improvement of single store efficiency.

It is estimated that the net profit growth rate in 2012-2013 years will be 27.5% and 24%. EPS is 1.54 yuan and 1.91 yuan, giving 21 times PE and giving the "recommended" rating.

Galaxy Securities researcher Ma Li and Li Jiajia pointed out that based on the massive investment in the previous two years, the development of American Apparel products and brand marketing have obvious advantages.

After the listing of the United States, many attempts were made in building big stores and developing new MC brands.

Driven by this, brand marketing, product development and other aspects are really ahead of competitors. The overall brand image is not only suitable for the two or three line cities, but also has great influence and appeal in the first tier cities.

If the company's supply chain management capability, especially the replenishment speed, can be improved, the development space and development potential are enormous.

It is estimated that revenues in 2012 and 2013 will be 125 yuan and 15 billion 600 million yuan respectively, with net profits of 15.4 and 1 billion 980 million yuan respectively, with EPS of 1.54 and 1.98 yuan respectively.

Give "recommended" rating.

Semir: 7 billion 760 million children's wear increased strongly

Annual revenue is lower than market expectations.

Semir clothing 2011 annual revenue growth of 23.44%, slightly higher than the net profit growth rate of 20.58%; the four quarter single quarter revenue growth is 30.2%, 44.4%, 22.5% and 11.4%, the single quarter net profit growth is 27.8%, 31.1%, 22.9% and 10.6%.

Among them, the fourth quarter profit margin dropped by 3.4 percentage points year-on-year, 1.6 percentage points year-on-year decline.

Zhang Bin, a researcher at the state securities company, pointed out that the growth of Semir's net profit was slower than that of the revenue growth due to the impact of rising cost of raw materials and labor costs, and the obvious suppression of high demand products on terminal demand.

CIC Securities researcher Zhang Lei and Shi Ying pointed out that the annual income in 2011 was slightly lower than previously expected.

On the one hand, as casual wear, especially women's clothing products, is becoming more and more fashionable, the fashion of Semir's casual wear products needs to be upgraded. At present, the company's fashion is improving. Two, Semir's channel development speed is lower than expected. In 2011, Semir's channel grew by about 500, lower than that of 700 previous expectations, mainly due to the slow down of dealers' expansion rate due to product reasons.

The net profit growth rate is lower than expected and lower than the income growth rate, mainly from the increased investment in terminal stores after the listing, and strengthened the company management, so that the sales cost rate and management cost rate have been improved.

Zhejiang Merchants Securities researcher Cheng Yanhua pointed out that the company's performance in 2011 was slightly lower than expected, and the growth rate of performance rose from high speed growth to stable growth.

There are three main reasons. First, the casual wear industry is facing an overall de stocking pressure in 2011. The two is that the warm winter weather in 2011 makes the winter wear of casual wear uneasy. Three, the casual fashion style of the company is not enough. Among them, women's clothing is more obvious, resulting in the product being marketable.

The expansion of stores in the whole year is also lower than expected. As the rent rises too fast and the location of high-quality shops is hard to find, the number of new outlets is lower than expected. Due to the backlog of inventory and the intensified competition in the whole industry, the progress of franchising is slightly lower than expected.

As the headquarters moved from Wenzhou to Shanghai in 2011, there was a large increase in personnel resettlement and other related expenses. At the same time, the related expenses of the company listing and the marketing expenses of the stores also increased, so the annual cost rate was estimated to be about 2.6% higher than that in 2010.

Leisure wear entered the adjustment period, children's wear growth is still strong.

The youth casual wear industry is facing increasingly fierce competition. The high-end market of the second tier cities has been impacted by the fast fashion brands such as Zara, H&M, Uniqlo and other fast fashion brands in the Chinese market. The middle and low end market is impacted by the regional brands with online shopping and lower prices.

The competition of children's clothing industry is not as fierce as that of teenage casual wear. Although other leisure and clothing brands are also actively entering the children's wear market, Barbara's market share and channel size advantage are more obvious.

In 2011, the sales of Semir casual wear increased steadily, and the franchisees also had more stock in the hands.

But sales of children's wear is still strong, business income growth is nearly 40%, channels are expanding more than 700, and the total number of stores is about 3200.

In the next few years, Semir's goal is to increase the share of children's clothing from about 1/4 to 1/3-1/2.

Guo Jin Securities researcher Zhang Bin pointed out that the target consumer price sensitivity of middle and low end casual wear is high, and the ability to raise prices under the inflation background is limited. At present, the impact of rising cost and slowing consumption growth is most obvious.

In the early stage, prices will push up product prices because of rising costs, and future consumption growth will show a slow downward trend.

At present, Semir has changed from "channel driven performance" to "product driven, retail capability driven" pition. In the future, it will enter the stage of "extension" expansion to "endogenous" growth adjustment. It is expected that the growth rate of leisure wear will be relatively stable in the future, and the growth rate of income is slightly higher than that of the industry as a whole. However, the pace and effect of adjustment should be observed.

Zhang Bin believes that the children's clothing market is at the stage of leisure wear development 5 years ago, and the children's wear industry is in a period of rapid development.

Barbara's children's clothing has prominent competitive advantages, positioning high-end, has a certain ability to raise prices, and children's clothing profit level is higher, to cope with rising cost elasticity, consumption growth decline has a relatively small impact on performance.

Taking into account the low base of children's clothing business, the first mover advantage is obvious, and the growth rate in the future will be faster than the overall growth rate of Semir. The growth of children's clothing business is expected to boost the overall growth of the company's performance.

On the whole, the net profit in the 2011-2013 years is 1 billion 208 million yuan, 1 billion 461 million yuan and 1 billion 724 million yuan respectively. The EPS is 1.804 yuan, 2.180 yuan and 2.573 yuan respectively, up 20.76%, 20.86% and 18.04% respectively.

Give 23 times PE in 2011 and give a "buy" rating.

Guo Haiyan, a researcher at CICC, pointed out that the growth rate of casual wear income in 2011 was about 20%, significantly lower than that in 2010, while children's clothing still maintained a relatively high income growth rate of about 40%.

In 2012, the company's primary goal is to upgrade products, followed by brand promotion and maintaining the speed of channel expansion.

Clothing consumption demand is constantly upgrading and subdividing. Teenagers have higher requirements for the design and fashion of casual clothes.

Semir's original rough product line division and slower renewal rate of goods are increasingly unable to meet the demand. In 2012, we plan to launch fashionable women's clothing with shorter product cycle in the form of different orders from traditional orders.

A small profit cut forecast is expected to be 2.24 and 2.79 yuan in the 2012-2013 year EPS.

Maintain the "prudent recommendation" rating.

CIC Securities researcher Zhang Lei and Shi Ying pointed out that Semir's growth in the future will depend on the improvement of the product's fashion richness and the continuous expansion of the channel's "two wheels" drive.

In 2012, the company increased its product development. The spring and summer ordering will increase the number of products by 30%. The style and the fashion of the products will be improved significantly in the autumn. The leading period of fashion will be adjusted to 2-3 months in the future, and the online ordering system will be tried.

Balbala mainly maintained high growth through the continuous increase in the number of channels. Its base in 2011 is still small, and the children's clothing store needs a small area, small investment and fast development. It is estimated that the growth rate of the channel will be about 25% in the future.

It is predicted that EPS will be 1.85, 2.25 and 2.84 yuan in 2011, 2012 and 2013, giving 20 times PE in 2012 and maintaining "recommended" rating.