Three Capital Platform Linkage To Open Up New Market

Three, the capital platform linkage layout, to create an international and Internet based "Pan fashion ecosystem".

Long term recently disclosed a quarterly report, which is in line with our earlier expectations: Q1 income was 327 million, down 2.1% compared to the same period last year; operating profit was 40 million, down 35.7% compared to the same period last year; net profit attributable to parent company owners was 36 million, down 41.6% compared with the same period last year.

At the same time, the company expects that the net profit attributable to parent company owners in 15 to 1-6 months will be 388 billion 700 million to 680 billion 300 million, down 60%-30% from the same period last year.

We believe that the worst stage of the company has passed, the income decline has narrowed and the gross profit margin has remained relatively stable.

Q1 gross margin was 58.4%, unchanged from the same period last year.

The sales cost increased by 9.3% to 107 million compared with the same period last year, and the management cost increased by 4.1% to 40 million compared with the same period last year. The sales expense rate plus the management fee rate increased 44.9%, up 4.1 percentage points from the same period last year. The adjustment of the company's organizational structure was basically in place. The increase in the labor cost brought by the introduction of high-end talents has come to a close.

The financial cost is 4 million 650 thousand, an increase of 628.41% over the same period last year. The reason is to pay interest on bank loans and no bank loans in the same period last year.

The increase in the three costs resulted in a 35.7% decrease in Q1 operating profit over the same period.

Operating cash flow has been greatly improved.

Q1 net operating cash flow of 119 million, an increase of 159.5% over the same period last year, accounts receivable 100 million (compared with the same period last year dropped 32 million, compared with the beginning of the fall 8 million), inventory 497 million (compared with the same period last year 50 million, lower than the beginning of 61 million).

The net cash flow of investment is -1.44 billion.

The net cash flow of financing is -0.03 billion, mainly from the distribution of dividends, profits or cash payments for interest payments.

We estimate that the revenue scale will be 1 billion 334 million and 8% in 2015.

Scale 140 million, the growth rate of 16.4%, EPS0.71 yuan, the current market value of 7 billion 400 million.

Since our initial recommendation, the company's share price rose significantly, taking into account the company's acquisition of Lianzhong international, three capital market layout exceeded our expectations, the subsequent dependence.

The continued integration of advantages is full of imagination and continues to maintain the recommended rating.

At the end of 2014, the company invested a total of 312 million yuan to hold 26.63% stake in Korea's first big baby brand akaban, and established a cross border capital structure with two Chinese and Korean listed companies as resource integration platform, which directly butted and integrated Korean fashion, mother and baby, cosmetic and other cultural and fashion industry resources, and the international layout took shape.

In April of this year, the announcement invested 7 million 500 thousand US dollars (about 46 million RMB) to participate in the world's fast fashion products.

Rookie --HifashionGroupInc. (Star wardrobe) 5% stake, with the help of "star Wardrobe" APP traffic entry, layout mobile business.

The same month announcement invested HK $1 billion 193 million (about 950 million yuan) to control 28.90% of the shares of the United Nations. Lianzhong international, as the second largest online chess game operator in the country, has an authentic Internet gene. It is an important step for the company to enter the Internet industry. The company will take advantage of Lianzhong international O2O chess game traffic entrance, and create a three-dimensional fashion ecosystem with online and offline resource linkage.

Since then, the company has achieved three linkage layout, becoming the first enterprise in the A share market consumer goods field to have three capital market operation capability.