Seven Wolves To Upgrade Brand Remodeling And Strive To Create New Achievements

Channel adjustment and stocktaking may not be over yet. We believe that the channel adjustment and inventory of the company may not be over yet.

The company continued to shrink over the past 14 years. We expect a net decrease of about 500 stores throughout the year, with a reduction in the number of 505 stores in 13 years. It is estimated that there will still be a certain degree of closure in the 15 year.

In order to reduce the pressure on franchisee stocks, the company increased the inventory recovery and pferred a large number of stocks to the table. Inventory growth in the 14 quarter and the 3 quarter increased by 24.2%, and inventory turnover continued to slow down.

Promoting brand remodeling, promoting brand remodeling and upgrading during the adjustment period, including 1) improving products, employing famous international designers, strengthening product planning and design planning functions; 2) changing the current electricity supplier function based on stock clearing, and trying to push the ultimate shirts with the brand of wolf brand totems in 14 years to create low rate and high quality products.

3) strengthen the management of the terminal: implement the channel optimization project, formulate corresponding support measures for different regions, and promote the construction and promotion of the retail Standardization Implementation demonstration shop, and enhance the terminal store efficiency.

Cash flow is abundant, layout investment business company has clear investment + industry strategic pformation direction: in optimizing the main business competitiveness, at the same time layout fashion consumption field investment.

We believe that the company's ample cash also provides the possibility for the strategy. The cash flow of business activities increased 18.3% in the 14 quarter of the previous three years, and it was about 3 billion 600 million yuan in cash in hand.

The company's recent investment plans include the investment of 300 million yuan and the cooperation of Hong Zhang capital to launch the consumer industry fund, and 315 million yuan invested in the establishment of Qianhai reinsurance company, accounting for 10.5% of its registered capital.

Valuations: raise target price to 9 yuan, maintain "sell" rating, we think that the main business of the company is actively pforming and with the gradual going to stock, the profit rate will begin to recover in the second half of 15 years. We increase the EPS forecast of 16/17 to 4.2%/4.8% yuan to 0.48/0.54 yuan in the year of 4.2%/4.8%; plus, the investment industry may bring about the extension growth point, we raise the target price to 9 yuan (original 8.2 yuan), the current stock price corresponds to 26 times PE in 15 years, which is 16 times higher than the 12 years.

Maintain "sell" rating.

Target price is based on UBS VCAM discount cash flow valuation model, WACC=8.5%.

Extended reading:

Fujian

Industrial Limited by Share Ltd editor seven wolves (Fujian WOLVES WOLF industrial Limited by Share Ltd) generally refers to Fujian seven wolves industrial Limited by Share Ltd

The company dominates clothing development, production and sales, and owns "seven wolves".

It is a listed company based on brand management. The company is a large enterprise that operates seven wolves brand male casual wear. It is a high-tech enterprise recognized by science and technology department.

With three R & D centers in Shanghai, Hongkong and Tokyo, the world's advanced computer automation production equipment, the international standardization and closed Industrial Park, is the representative of the senior male leisure wear in China, and is among the top ones in the national casual wear industry, and is the vice chairman of the national casual wear Association.