Semir Clothing: Leisure Wear Integration Results

Semir

Today's 2014 annual report, the performance is in line with expectations.

(1) 2014 revenue increased by 8 billion 147 million, an increase of 11.7% compared with the same period last year, operating profit 1 billion 474 million, an increase of 19.3% over the same period, and net profit 1 billion 88 million, up 20.6% over the same period last year.

(2) according to the calculation, Q4 income in 2014 was 2 billion 786 million, an increase of 17.7% over the same period last year, operating profit 593 million, an increase of 15% over the same period, and net profit 419 million, up 19.6% over the same period last year.

(3) the profit distribution plan pays 10 yuan (including tax) for every 10 shares, and 10 shares for every 10 shares.

Revenue growth is in line with expectations, growth driven mainly from children's clothing, casual wear adjustment effect slowly emerged.

2014 Barra

The income was 3 billion 167 million, an increase of 24.91% over the same period last year, an increase of 4 percentage points to 39% of the income, an increase of 69 to 3540 stores, a decrease in the trend of casual wear, and a reduction of 487 to 3542 households in the stores, which resulted in 4 billion 900 million incomes and a 4.69% increase over the same period last year. We think Semir

After nearly two years of adjustment, the effect has gradually emerged from the second half of 2014 (2014 casual wear H1 income 1 billion 724 million, down 4.35% compared to the same period).

In the second half of 2012, -2013 closed no profit channel and handled inventory, and effective adjustment of supply chain in 2013 -2014 and channel for 2014-2015 years.

Combined with the order meeting data, we believe that 2015 spring and summer is expected to achieve two digit income growth; if the channel adjustment measures are in place in 2015, we will not rule out the possibility that leisure wear will enter the fast development corridor in 2016.

In the case of increasing the intensity of the impairment loss, the operating profit margin of the 14 year increased by 1.2 percentage points to 18.1%.

Benefiting from the end of supplier centralization and de stocking, the gross margin increased by 0.8 percentage points to 36.1%.

Sales expenses fell by 0.28% to 919 million compared to the same period last year, mainly due to the closure of a large number of unprofitable shops, resulting in a significant decrease in rental fees (from 253 million in the same period last year to 200 million).

Management fees increased by 19.57% to 312 million over the same period, mainly from the company's increased R & D investment, attracting talented people to increase R & D fees (from 66 million in the same period last year to 103 million) and staff salaries (from 63 million to 77 million last year).

The financial interest income was 136 million, 40 million less than that of the same period last year (as part of the increase in interest income and investment income). The increase in the company's impairment loss was further increased from 2.82 in the same period last year to 365 million.

Non operating income was 38 million 630 thousand (66 million 410 thousand in the same period last year).

If we exclude the reduction in financial interest, the increase in impairment losses and the decrease in extra business income, the company's performance will increase even faster.

Operating cash flow was 762 million (1 billion 392 million in the same period last year).

There was no significant change in inventory (0.48% to 1 billion 34 million over the same period last year).

Accounts receivable increased by 4.04% to 1 billion 77 million, mainly due to strengthening the support of the franchisee.

Maintain the recommended rating for the company.

The company's performance growth in the next 2-3 years is definitely high. It is estimated that the income scale of the company in 2015 and 2016 is 90.96 and 10 billion 278 million respectively, up 11.6% or 13% compared to the same period last year. The net profit scale is 1 billion 359 million and 1 billion 640 million respectively, increasing 24.4% or 20.7% respectively, corresponding to EPS, 2.03 yuan and 2.03 yuan respectively, and the current share price corresponding to PE is respectively 20.7% times and nine times.

Taking into account the effectiveness of the company's casual wear integration (the centralization of suppliers, the direct management of some franchisees in the future), and the imagination of children's industrial clusters and online business development, the recommended rating is maintained.

The short-term catalyst for stock price performance lies mainly in the success of investment merger and acquisition and resource integration in the children's industry (animation, film and television, games and related industries).