Nike, Adidas And Other Three Major Footwear Industry Performance Gains

Baosheng International (3813) rose 8.4% last Friday, a record high this year. The reason for the company's high share price is that last Wednesday NIKE announced its first quarter revenue, showing a brilliant performance, with an annual increase of 5%. footwear Revenue grew by 18% annually, followed by Clothes & Accessories 12%. The gross profit margin of the company expanded 0.9% to 47.5%, and its profit increased by 23% compared to the same period last year. In the first quarter of 2015, the surplus amounted to US $1.34, which was 12.6% higher than the market forecast. October 1st was the National Day holiday, while the stock market in Hongkong and China was closed, but Taiwan still opened, and the Taiwan related stocks of Nike had taken the lead in the same day, while Baosheng International (3813) was lagging behind.

In addition to Nike, Adidas, the two brands, in fact, the author also has a long-term attention to New Balance brand. Although New Balance is not Private Companies's earnings report, its CEO Rob De Martini has revealed that in 2014, its earnings reached $3 billion 300 million in 2015 and nearly $4 billion in 2015. That is to say, this year's revenue growth is more than 20%, far exceeding the single digit growth of Nike. New Balance has been able to record such a high double-digit growth, in addition to traditional products. Running shoes Another important contribution is the extension of its product line to football and basketball. On the face of it, New Balance has entered the football industry this year, but in fact, the company acquired the brand "Warrior" ten years ago and produced soccer products. Although Warrior has sponsored many football teams for many years, its brand reputation is still at the two or three level. New Balance decided to change its name into the football world to find a breakthrough.

Hong Kong stock also has New Balance beneficiary shares, which is Xinxing (1170). Xinxing is the shoe making OEM. Its current customers include NewBalance, Clarks, Skechers, Asics and Wolverine, accounting for 85.6% of the total turnover. The company has production lines in China, Vietnam and Kampuchea, Vietnam has 20 production lines, Kampuchea has 10, China has 14, and a total of 44. Compared with Southeast Asian countries, the labor cost in China has increased. Several years ago, the company has actively developed the Southeast Asian production line, and the production line has become more and more mature, and now it can enter the harvest period. The US Federal Reserve almost certainly raised interest rates this year, the US dollar regained its momentum and the emerging market currencies plummeted, with half of its capacity in Vietnam and Kampuchea, where wages were paid in local currency and the dollar was charged, which is favorable for us.

Based on the strong momentum of development of NewBalance and other brands, it is expected that the profit growth of the company in the coming year will still exceed 20%, and the gross profit margin will also increase. The price earnings ratio will decrease to 10 times in the coming year. Suppose that the dividend yield of the company will be maintained at 67.1%, and the dividend return will be 7%.