The Strategic Pformation Of Red Bean Clothing Has Been Effective.

The strategic pformation of clothing has achieved initial success, and financial costs have absorbed some profits. Through accelerating the construction of retail outlets, electricity suppliers and group buying channels, the strategic pformation of the company to the brand retail oriented enterprises has achieved initial success in the first half of 2012.

Business revenue reached 466 million yuan (revenue accounted for 60.28%), an increase of 46.04% over the same period, and the gross profit margin of clothing business was 34.52%, an increase of 7.67 percentage points over the same period last year.

Due to the impact of macroeconomic regulation and development cycle, the company's real estate settlement income decreased in 2012, operating income was only 156 million yuan, a decrease of 46.28% over the same period last year.

Despite the increase in clothing and textile industry revenue, the overall revenue of the company rose slightly (up 4.13% over the same period last year), but because of the increase in the cost rate, especially the rise in financial costs, the company's profit in the first half of the year dropped by 57.2% compared to that of the previous year, which was only 13 million 160 thousand yuan.

Sales rebound will lay the foundation for the future performance of real estate business: the company is currently building and planning 7 real estate projects, with a building area of about 1000000 square meters, located in Wuxi, Zhenjiang and Nanjing.

Severe real estate regulation has had a certain impact on the sales of real estate since 2010. In 2010 and 2011, the company received a sharp decline in the amount of advance receipts for the two consecutive years. At the end of 2011, the company received only 350 million yuan in advance, which was significantly reduced compared with 1 billion 73 million yuan at the end of 2009.

Real estate sales in some cities began to pick up since April 2012. The company's town Jiangxi lotus pond project, the Wuxi nine cotton plot project and the red bean square project achieved good sales results during the reporting period, and the net sales revenue increased by about 350 million yuan. Up to the middle of 2012, the company received about 613 million yuan in advance.

It is expected that the rebound in real estate sales will continue. The company's good sales will lay the foundation for real estate performance in the next two years.

Earnings forecasts and investment recommendations: the company expects earnings per share in 2012 -2014 to be 0.07 yuan, 0.09 yuan and 0.13 yuan.

The development strategy of the company's clothing industry is very clear, that is, with the development of men's clothing chain monopoly as the core, strengthen the professional clothing group buying business, and rapidly expand the e-commerce channel.

Chain monopolization, group buying and electric business and other multi-channel development strategies are conducive to the rapid expansion of the company's garment industry. As an earlier menswear brand enterprise, the company has certain advantages in product design and production, providing strong support for the development of terminal retail.

The more abundant land reserves and available resources make the company fully benefit the current real estate recovery. The land resources obtained at the low price of the real estate fully guarantee the profit of the real estate project and provide a good guarantee for the future performance of the company.

For the first time, the company increased its rating, and the target price of 6 months was 4.84 yuan, corresponding to 2 times PB. in 2012.