AOKANG Shoe Industry Is Running Well This Year Because Of Good Inventory.

Orient Securities expects AOKANG's terminal inventory in good condition.

1) the 50% replenishment system improves the ability of the terminal to respond to market changes, and solves the risk of terminal generating inventory from the source.

2) the company's terminal sales rate is expected to be around 90%.

3) the nature of credit sale in leather shoes industry determines that it is difficult for companies to push the goods to the terminal because this will directly lead to the increase of accounts receivable and the worsening of cash flow. From the company's historical financial data, 2011

The annual turnover of accounts receivable was 4.5, better than 4.12 in 2010.

The sales mode leads to a lower turnover rate of the company's accounts receivable than the listed companies in the same industry.

Daphne's direct and Street store mode has the highest turnover rate of accounts receivable, followed by BELLE international direct store and mall store store mode (general store 1).

Monthly account), and the company takes the franchise as the main street shop mode, usually to the dealer 3.

Accounts receivable for a month, so the receivables turnover rate is relatively low.

But according to our grassroots research on some brand shoe enterprises in Wenzhou, the accounts are far longer than the company, reflecting that the receivables turnover rate of the company is far better than that of its industry under its similar model.

First, from the scale, Kanglong 2011

Annual revenue of 3.5 billion, red Firebird 1.5 billion, have entered the rapid development of the brand, and secondly, the initial stage of brand cultivation independent of AOKANG's main brand franchisee system, including the control of the investment area (only in 5/6

In a province), the two brands have set up a regional brand effect well, and the future use of better platform and resources after the listing will effectively promote the development of the whole channel through the radiation of adjacent areas.

AOKANG's spring, summer and autumn three quarter orders will increase the volume of the order is expected to be around 30%.

Orient Securities expects that the order growth rate will be around 29% in spring and summer, and the order will increase by about 30% in autumn.

The price increase is expected to be around 5%, so the growth of the order amount comes mainly from the increase of sales volume.

Although the order can only lock 50% of the company's sales revenue, it can also reflect to some extent the franchisee's confidence in the market.

Orient Securities is optimistic about the company's performance growth this year.