AOKANG: Business Turning Point Is Approaching, Employee Stock Ownership Shows Confidence.

The industry structure has gradually changed from "Pyramid" to "spindle shaped", and the competition situation is becoming clearer now. The industry competition is concentrating on several major brands.

In addition, the impact of foreign brands on men's shoes is relatively small. AOKANG, as the leader of domestic men's shoes, will fully benefit from the upgrading of the industry's low trough and the change of competition pattern.

The company has always been in the forefront of the industry in terms of business adjustment and mode pformation. As the adjustment strategy of the direct battalion is drawing to a close, the adjustment effect is gradually emerging. Meanwhile, through the support of distributors and the centralized digestion of inventory, the inventory pressure gradually decreases.

At present, the turning point of the company's performance has been basically established. In the future, with the recovery of terminal retail and the acceleration of the construction of the International Pavilion, the company's business is expected to recover steadily and enter a stage of rapid development.

Long term strategic direction: O2O consumption mode + personalized customization, scale production.

In the medium and long term, we also see the company's active exploration and layout in O2O and personalized customization and large-scale production. We are optimistic about the natural O2O attributes of men's shoes, and personalized customization will be the inevitable trend of future development, but the demand for supply chain is very high. With the application of big data and 3D printing technology, we can also see that the company's continuous efforts in supply chain construction and product research and development, once it has the basis of large-scale promotion, will have great potential for application, and will also bring more extreme shopping experience.

The introduction of employee stock ownership plan highlights future development confidence.

The company recently launched an employee stock ownership plan. Its participants covered 51 executives and employees, and the subscription scale of the scheme reached 133 million yuan, with a lockup period of 1 years.

The biggest highlight of this plan is to use share structure to enlarge employees' profits and losses, and fully demonstrate their confidence in the company's future development.

Risk warning.

Terminal retail environment continues to slump; industry adjustment period is longer and recovery is slow; international stores are not as fast as expected.

Raise the rating to "buy", a reasonable valuation of 23 yuan.

As a leader in domestic shoe industry, the company is expected to benefit from the upgrading of the industry's low trough and the change of competition pattern. The leading edge is more prominent.

At the same time, through the promotion of new channels such as the International Pavilion, the extension space will be further opened. The future business is expected to be restored steadily. The turning point of operation has already appeared. The company has recently launched an employee stock ownership plan to show its confidence in the future. In the medium and long term, the company's promotion in O2O and personalized customization and standardized production is also worth looking forward to.

Adjust the 14~16 profit forecast to 0.59/0.78/0.99 yuan, raise the rating to "buy", the company reasonable valuation of 23 yuan, corresponding to 15 years PE 30X.

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