AOKANG Leads The Middle And Low Grade Leading Shoe Enterprises

　　 AOKANG In the domestic low-grade men's shoes market has established an absolute leading edge, in the low-end women's shoes market also has certain advantages, the future development of men's shoes is stable, the development of women's shoes business is very important for the company. Through the comparative study of Daphne and other products, the number of AOKANG's main brand stores has matured, but if Kanglong and other sub brands are mature, the opening space will be further opened, but the quality of non strong regional stores should be paid attention to. In recent two years, relying on a larger proportion of new shops to promote steady and rapid growth of performance, valuation is not high, and the future refinement management and improvement of terminal control, as well as the development effect of multiple brands is the key to sustainable development of the company.

Differentiation leading medium and low grade leading shoe enterprises. In the three or four tier cities, relying on Exclusive shop The development of low-end men's shoes brands are mainly two kinds, one is the brand of synchronized development of shoes for men and women, the other is the brand of shoes extended by the international authorized brands and Hong Kong and Macao clothing brands. AOKANG has the comprehensive strength and the largest scale, and the competition level of the middle and low level men's shoes is relatively less intense. The women's shoes market, especially the high-end market dominated by shopping malls, has formed the unique competitive pattern of BELLE. AOKANG's overall size in the women's shoes market is still relatively small. But in the low-end women's shoes market also has certain differentiation advantage, but the advantages are not as good as men's shoes, and the brand sink of BELLE shoes may sink into the market pattern.

The multi brand strategy with low and medium location as the core is beginning to see. Kanglong has developed into the leading brand of the male leisure shoes market, forming certain support for the company's multi brand strategy. However, the future development effect to the non strong region still needs to be observed at the same time.

Three or four line market and distributor oriented channel system, terminal control power needs to be improved. AOKANG's brand has already opened up a smaller space. It will rely more on new brands to open stores in the future. It needs to pay close attention to the marginal benefits of new stores. The two tier distribution system is not flat enough, and terminal control and retail capacity remain to be improved. The expansion of AOKANG's main brand in the past two years can still be seen, but the pace of expansion next year will continue to slow down. If Kanglong and other brands will further mature in the future, the number of stores will be further opened. However, with the increasing scale of stores and the increasing number of new brands, it is necessary to focus on the marginal benefits of new stores, and whether the fine management level of the company can match the growth of scale.

Earnings forecasts and investment recommendations: in the past two years, mainly rely on a larger proportion of new shops to drive the growth of performance. 12-14 years of EPS are expected to be 1.36 yuan, 1.67 yuan and 1.95 yuan / share respectively, corresponding to 18 times PE in 12 years, and maintain the "prudent recommendation -A" rating. In the near future, because the sales of the company are smaller than that of the second tier cities, and the cost performance of the valuation is better, it can give attention to get a steady income.

Risk warning: Exit Further drag; the marginal benefits of new stores declined; the same store growth slowed down.