Roley Home Textiles: "Industry + Capital" Double Power To Promote The Layout Of Large Household

In 15 years and 1-9 months, the company achieved operating income of 2 billion 46 million yuan, an increase of 8.84% over the same period, and a net profit of 324 million yuan, an increase of 17.03% yuan, EPS0.46 yuan.

The main reason for the increase in revenue was the acquisition of more than 10 franchisees last year, resulting in the epitaxial growth and wholesale mode shift to the direct expansion of the direct mode.

Business has also contributed to some growth.

Net profit growth is higher than income. It also benefits from the pformation of business mode, promotion of internal markup and sales cost control.

15Q3 realized revenue of 796 million yuan, an increase of 3.70% over the same period last year, and realized net profit of 140 million yuan, an increase of 17.36% over the same period last year.

The growth rate of 14Q1-15Q2 revenue was 6.82%, -1.67%, 19.10%, 9.96%, 7.31% and 19.70% respectively, and the net profit growth rates were 15.17%, 14.14%, 19.23%, 27.80%, 17.63% and 15.34% respectively.

Gross profit margin increased, sales cost increased.

Gross profit margin: 1-9 realized gross profit margin 47.67%, up 3.49PCT over the same period last month.

14Q1-15Q2 were 44.53 (+2.21PCT), 45.16 (+1.07PCT), 43.29 (+1.27PCT), 46.33 (-0.44PCT), 47.78 (+3.25PCT) and 49.01 (+3.86PCT) respectively.

Fee rate: 1-9 month sales fee rose 1.01PCT to 22.60% compared to the same period, the management fee rate increased 1.47PCT to 8.19%, and the financial cost rate increased 0.45PCT to -0.50%.

The income tax rate increased by 0.15PCT to 12.87%.

Q3 single quarter sales, management and financial expenses rates were 20.52% (-0.52PCT), 7.28% (+1.66PCT) and -0.37% (+0.28PCT) respectively.

Other financial indicators: 1) at the end of the three quarter, inventories dropped 5.86% to 596 million yuan compared with the beginning of the year, and the inventory turnover rate was 1.74, which was slightly higher than the recent three years.

2) accounts receivable increased by 53.35% to 240 million yuan from the beginning of the period, mainly due to the macroeconomic impact. The company increased its support for franchisees.

Joining the direct battalion mode promotes internal and external development.

Large household extension industry chain

The company takes the form of equity cooperation with franchisees, from wholesale pformation to retail sales, strengthens terminal control, complies with the trend of the industry, develops the business of electronic commerce, and pforms the home market of tens of millions of scale. Internal innovation sets up the partner mechanism of Luo Lai to provide intellectual support for pformation.

The conditions inside and outside the pformation are mature, and the results are beginning.

Previously, the company's revenue accounted for 80%. With the improvement of the proportion of the company's electricity providers and the continuous cooperation with franchisees, the company plans to achieve 50% direct and direct battalions in the next 3 years.

New brands / categories and new channels of multi-level integration development, bold trial and error to seek growth potential.

From home textile brand expansion to home brand, from the high-end brand of Luo Lai home textile to the location of civilian Lok's brand, from offline brand to LOVO Electric brand, and then to all brands to open one stop home hall, there are plans to lead offline brand to online.

The company is actively trying to develop business in many dimensions and seek new growth points in the future.

{page_break}

New 300 million Internet smart home industry fund, continue to promote the "Internet +", "smart +" strategic objectives

The company proposed Smart Home + big healthy ecosystem + Internet "industry + capital" two wheel drive strategy, mergers and acquisitions quickly landed.

Strategic cooperation with Shenzhen and ertai has been launched, and Internet investment fund has been established respectively with AI Zi Guan and Gobi Chuang Sheng. It has launched an industrial investment fund with Yuhua, and set up a wholly-owned Sun company "Nantong Luo Lai Smart Home Technology Co., Ltd.". Jingdong has invested 21.17% stake in Shenzhen's Midea and become the largest shareholder.

In October 28th, the company announced the establishment of an investment fund with Shenzhen Qianhai Indus buyout Fund Management Co., Ltd. and other partners to serve the integration of the home textile industry of the home textile industry.

The target size of the first phase fund raising is 300 million yuan, of which the company contributes 50 million.

The fund's investment direction is mainly based on Internet smart home, vertical electricity providers and big data, focusing on intelligent equipment and fast-growing enterprises in the field of Internet home.

In October 28th, the company announced that the Chinese name would be changed from "Luo Lai home textile Limited by Share Ltd" to "Luo Lai life Polytron Technologies Inc".

At the same time, the suspension was planned in October to issue a non-public offering.

Continuously optimistic about the layout of the company's large household, and maintain profit forecasts and ratings.

The company has intensified internal fine management, continuous optimization of channel inventory and continuous improvement of retail capacity. The company expects net profit growth of 15 in the year to 0-20%.

The stock of home textile industry has reached a reasonable level, and the industry has gradually come out of the trough. But because of the weakness of the home textile market as a whole, the recovery slope is relatively slow.

In the next 3 years, the proportion of direct and direct battalions in the next 3 years will reach 50%. With the continuous development of cooperation with franchisees and the optimization and integration of direct channels, the performance of domestic retail will continue to grow. (2) the product category will see the pformation of trillions of market scale from home textiles to the home market, with huge space. The aim is to integrate the excellent home brand and smart home market. The investment funds set up by partners will gradually fall to the ground and bring new growth points. (3) on the product brand, the company develops a multi brand strategy. Besides the original home textile brand, it focuses on the location of different brand names, such as different brands, Luo Lai, and so on. Our judgement is: (1) the pformation of the channel is a strategy for the company to join the direct pfer business.

Brand LOVO and so on. In the future, we hope to introduce online, expand the brand influence and market share, and achieve two-way growth on line and online.

Maintain 2015/16/17 EPS0.67 yuan, 0.8 yuan, 0.99 yuan profit forecast, maintain buy rating.