Consumer Awareness Boost Underwear Retailing

Urban beauty released its first annual report since 2014, accounting for an increase of 37.4% in the year of accounting, compared with the same period last year, about 4 billion yuan. The net profit attributable to shareholders of listed companies increased by 54.2% over the same period last year, or about 425 million yuan. According to this calculation, the net profit of urban beauty in the past 2014 degrees was about 1 million 160 thousand yuan per day.

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The reason for the year-on-year rise is that the company's explanation in the annual report is that the increase in the number of franchised stores and self run stores has led to an increase in the sales of the products already sold, plus the improvement in the performance of franchised stores and self operated stores; and

And continuous improvement of product mix, further integration of industry supply chain and continued consolidation of economies of scale. "

City beauty chairman, executive director and Chief Executive Officer

It is believed that the performance of the company has been greatly improved compared with the same period last year, and has much to do with the continuous improvement of consumers' awareness: "in 2014, the per capita disposable income and per capita consumption expenditure of urban residents in China increased year-on-year, indicating that the living level of urban residents has been rising and stimulating the development of China's retail industry.

In addition, Chinese consumers' awareness of fashion concepts, product quality and upgrading capabilities is expected to further promote the retail sales of underwear industry.

As of December 31, 2014, the city beauty retail network has 7026 stores, 6049 of which are franchised stores, and 977 stores are proprietary stores.

Shortly before the release of the financial report, the city beauty also announced the acquisition of Ordifen. At that time, the company CFO Yu Zhen ball mentioned in the interview that although the primary task is to "digest" the business of mergers and acquisitions, but in the future market development, the city beauty will show the characteristics of epitaxy.

From the content of the annual report, the company is also carrying out the integration and layout of the industrial chain for the possible future expansion. "In response to the rapid expansion of the retail network, the group plans to build three regional logistics centers in Dongguan, Tianjin and Chongqing, in order to further enhance the material flow capability and shorten the time required to send products to the market.

Dongguan new logistics center is scheduled to open in the second quarter of 2015, and the Tianjin logistics center is expected to start in the second half of 2015.

City beauty says.

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Recently, the reporter has investigated the news birds, and has communicated with the management of the company. We believe that the bottom of the company's fundamentals has passed, and the future reversal trend is determined.

Brand and price adjustment ends.

Similar to most of the men's clothing industry, facing the adverse effects of economic adjustment and anti-corruption on men's clothing sales, the company has undergone 13 or 14 years of more in-depth adjustment. At present, the company has reduced the poor brand, series and higher price category, and reduced the original dozen brands to 8.

Overall, the price band (average price) dropped by about 1/3.

In the future, the company will reduce the product rate and create a brand with higher cost performance.

We should pay full attention to online channel sales, R & D and internal management to make full use of the Internet.

Since 2013, the advertising investment in traditional media has been decreasing gradually. By 2015, the focus of advertising investment has been tilted to the new media.

The sale of online channels is now 5% of the online sales of the birds, and it is hoped that online sales will account for 10%.

Other brands are also online.

The company attaches importance to the Internet on the other hand, which is reflected in the internal management and R & D, and the internal management of the Internet. The original designer LED R & D system has been pformed into a commodity planning oriented. Through the analysis of big data, the production and sales rate has been raised, making product design more close to the needs of consumers, and production and marketing are more effective.

Build multi brand, full channel and international brand.

In the future, the company will do more brand and channel operation around men's business and leisure areas.

All brands are covered by online and offline channels. In addition to reporting birds, Haggis's online business target accounts for 20% of the brand's sales. In addition, there is also the operation of a pure e-commerce brand.

Internationalization mainly refers to the brand of international standard, that is, low rate, high yield and Gaoping efficiency.

The rate of international brand is usually about 5 times. At present, the wedding bird is 7 times.

The company will further reduce the rate of reporting birds and keep pace with the international market.

At the same time, return to the essence of business, pay attention to the profitability of terminal channels, and turn off non profitable shops.

Volume private custom business opens up new space, which is worth looking forward to.

The company will focus on the volume of private custom business, through the intelligent pformation of production lines (Anhui, Shanghai, Wenzhou three lines will be completed this year), to achieve low-cost, fast production.

The company has expanded the business model of more than 20 quantity teachers in the whole country to more than 300 quantity division stores. Many brands have launched the volume customization business. The volume business will effectively enhance the customer's viscosity, the customized business space is larger, and the entry threshold is relatively high. The company will carry out the volume business as a regular business, and the future is worth looking forward to.

Maintain "recommended" rating.

After 2 years of adjustment, the company's assets structure, cash flow and inventory have significantly improved. With the resumption of terminal revenue growth in the 15 years, profits are expected to increase substantially.

Our forecast for the company's 2015-2016 year EPS is 0.44 yuan, 0.57 yuan, and maintain the "recommended" rating.