By Actively Controlling Inventory, Meibang Garments Reported Positive Growth

Since this year, Li Ning, Adidas Metersbonwe , Sima, etc Clothes & Accessories Enterprises are faced with such problems as the continuous aging of brands, the dilemma of reform and the unsalable inventory, among which the unsalable inventory is the most serious.

"As long as the inventory of goods in these years is reduced and sold out, the person who can run to the front will be the most popular one in the industry this year.". However, it is this sentence that has changed the performance of an enterprise - Meibang.

A few days ago, Meibang Garments released its semi annual report. In the first half of the year, the company realized a growth of 21.21% in total operating revenue to 4.6 billion yuan, and an operating profit of 527 million yuan. Of which, attributable to listed company The net profit of shareholders was 432 million yuan, an increase of 14.83% over the same period last year. Basic earnings per share also increased to 0.43 yuan from 0.37 yuan in the same period last year.

From the perspective of operating cash flow, the data of Meibang Clothing shows that the operating cash flow of Meibang Clothing in 2010 was - 1.05 billion yuan, and in the middle of 2011 was - 550 million yuan; In the second half of 2011, it turned around at one fell swoop, reaching 980 million yuan for the whole year; In the first half of 2012, it has reached 1.7 billion yuan. It is estimated that the annual operating cash flow will be more than 2 billion yuan. Since 2011, the operating net cash flow has shown a gradual improvement trend. Since the first half of this year, the improvement trend has become increasingly obvious.

Who would have thought that the growth of Meibang's performance fully confirmed what the above people said. According to analysis, the main reason why Meibang can turn loss into profit in the general environment is that it has reduced its inventory. According to the Chinese report, the inventory of Meibang apparel is expected to drop to 1.7 billion yuan to 1.8 billion yuan, with the inventory to sales ratio of 14.6%, which will return to the healthy inventory level from 2005 to 2009.

It is reported that since 2011, the company's inventory scale and structure have shown a trend of quarterly decline and optimization, and the inventory and sales structure has tended to be balanced. As of the end of the period, the inventory has dropped to 1.75 billion yuan, and the proportion of old products has continued to decline. If the quantity of goods and turnover of the company's direct marketing system are considered, the company's inventory control is at a reasonable level, which is safer than that of companies in the same industry.

When Meibang is actively dealing with inventory, in order to share the dividends of China's urbanization, the company will continue to adopt an important growth strategy of extensional expansion. In combination with the multi brand strategy, it is expected that the company's store growth will remain at about 15% in the future, with town level market as the main deployment target.

Although Meibang Clothing's financial report is gorgeous, it is affected by the overall environment, clothing The industry is still in recession. Therefore, it is suggested that investors should improve risk warning when entering the market.