Seven Wolves And Channel Construction Lay The Foundation For Development

Thanks to the rapid development of retail outlets, the growth of the seven wolves is more prominent. The current valuation is reasonable and the investment rating of "recommended A" is maintained.

"Seven wolves" as a well-known trademark in China, has a high reputation and reputation in the market, and the market share of products is among the best among the similar products.

Sports brand seven wolves and channel construction laid the foundation for development. For many years, the company attached great importance to brand building and maintenance, and successfully achieved a good combination of brand input and output.

Since 2004, the company's advertising investment has continued to grow. Although it has increased operating costs in the short run, it will play a positive role in the sustained growth of the company's sales revenue.

From 2004-2006 years, the advertising cost of the company increased by 96%, and the sales revenue also increased by 98%.

Since its establishment, the company's brand has insisted on the sales mode of franchising, and the sales channel is mainly based on agents and distributors.

With the continuous development of brand building, the company's channel construction has been developing rapidly. By the end of 2007, the company had 1976 stores in the country.

Store construction has become an important part of the company's sales and performance improvement, and is also an important foothold for the company to win in the fierce market competition in the future.

In June 2006, the company issued the "implementation of equity incentive plan".

The implementation of the equity incentive plan helps to improve the corporate governance structure, establish a mechanism of sharing interests between shareholders and professional managers, attract and retain outstanding managerial talents and business backbone, and promote long-term healthy development of enterprises.

Sports brand seven wolves and channel construction laid the foundation for development. Under the background of consumption upgrading, market demand for brand clothing increased rapidly.

In the past 2004-2007 years, the retail sales volume of the wholesale and retail enterprises above Designated Size with brand clothing retail sales increased by 18.7%, 19.6%, 19.2% and 28.7% respectively, which provided a good development environment for the development of "seven wolves" and other brand enterprises.

In October 2007, the company implemented public issuance to strengthen the construction of clothing retail channels: 10 new direct life hall, 10 joint life hall, 200 flagship stores and 600 franchised stores.

The implementation of the project will further enhance the market position of the company and expand the market share of the company in the field of men's casual wear.

According to the profit forecast of the company's additional projects, it is expected that sales revenue will be 1 billion 60 million yuan and net profit 124 million yuan after completion of the additional project.

Assuming that 2008 and 2009 completed 40% and 80% of the expected revenue of the additional projects, the sales of old stores in the 2008 and 2009 increased by 15-10% respectively.

We expect that net profit will increase by 64% and 28% respectively in 2008 and 2009, earning 0.52 yuan and 0.66 yuan per share respectively.

Sports brand seven wolves and channel construction lay the foundation for development in terms of potential risks. First, the company is facing the risk of competition in the industry.

First, competition among domestic garment enterprises.

With the increasing appreciation of RMB, many export oriented garment enterprises in China are facing increasing pressure, which will inevitably increase the competitive pressure of the domestic clothing market.

The two is the competition of foreign brand clothing.

With the rapid expansion of foreign brand clothing in the domestic market, industrial competition will shift from the competition of quantity and price to the competition of deep processing, new technology and high added value.

In the context of the sharp rise in manpower, raw materials and energy prices, whether the company can continue to maintain its competitive edge and face new challenges.

In addition, the company is also facing the risk of product design.

As a brand clothing enterprise, the products sold have certain fashion requirements.

Consumers' preferences for clothing styles and fabrics vary rapidly. If the company's product development capability fails to keep up with fashion requirements, it may face a lot of risk of unsalable products.