PEAK Will Maintain 6000 Stores This Year, With An Estimated 10 To 15 Distributors.

Recently, PEAK has achieved its full year performance.

On the other hand, the closing shop tide has ended. The number of 6000 stores will be maintained this year and the existing stores will be optimized to enhance profitability.

In addition, the group plans to increase 10-15 distributors this year.

PEAK also said that in terms of product mix adjustment, PEAK will not deliberately increase the proportion of footwear business, its strategic direction is footwear.

The business has achieved a more balanced development and continues to introduce cost-effective products.

In terms of marketing, although this year is the Olympic year, PEAK said it would not substantially increase the cost of promotion. Instead, it would use the way of sponsoring the Olympic delegation to reduce the promotion cost and maintain the promotion cost at 10%-14%.

It is reported that the Chinese market accounts for about 78% of PEAK's total revenue, while the rest belongs to the overseas market.

Although the depreciation of the RMB favorable group export market, but PEAK still conservative attitude.

In this regard, the industry does not have much hope.

Report summary: net profit increased by 22.3% to 392 million, footwear revenue outstanding performance.

In 2015, the company's revenue grew 9.4% to 3 billion 108 million, and net profit increased 22.3% to 392 million.

Thanks to the launch of five new running shoes, footwear revenue increased by 16.1%, accounting for 43% of revenue. With the relatively high gross profit margin of running shoes, the gross profit margin of footwear increased by 0.5 percentage points to 37%.

In terms of clothing, revenue grew by 4.3%, gross margin increased by 1 percentage points to 40%, accessories revenue increased by 19.1%, and accessories margin increased 0.8 percentage points to 37.9%.

During the period, the sale of NBA and China's sponsorship contract expired, and sales and distribution expenses were reduced by 8% compared with 2014.

The proportion of advertising and promotion expenses, staff costs and R & D expenses fell to 8.7%, 14.7% and 2%, compared with 10.6%, 15.8% and 2.2% in the same period in 2014.

The main battle three line cities increased single store efficiency and inventory turnover days, while overseas income maintained steady growth.

By the end of 2015, the number of retail outlets in China was 5999, a year-on-year net decrease of 5, but the number of 85 outlets in the three tier cities increased to 5224, accounting for 87% of all retail outlets. The number of distributors increased from 88 to 100, the average turnover of retail outlets increased by 11.5%, and the average turnover of the southern / Eastern / Northern retail outlets rose by 11.5%/10.5%/12.6% to 0.45/0.40/0.37 million, indicating that the distribution channels and consumer coverage were widened.

The average stock turnover days decreased from 74 days in 2014 to 63 days in 2015, and the cash flow of business activities increased 8.9% to 418 million.

During the period, overseas income increased by 3.1%, accounting for 21.6% of the total revenue. The products were sold in over 90 countries and regions, and the highest proportion of overseas sports apparel brands was overseas.

Orders will grow by two digits.

Gross margins and sales continued to rise.

The 2016Q1-Q3 order amount has a low to middle double digit growth (10-20%), in which the order orders of basketball and running footwear have increased to the highest double digits (10%-30%).

Compared with XTEP's footwear gross margin 43.5% (1H15), single store footwear sales (2014: an estimated 2532 pairs), the company's gross price of running shoes and sales of single store footwear (2015:2367 pair) should have room for improvement, and the average wholesale price of footwear has increased in the number of units, and the gross profit margin of footwear products can be further increased.

Although the number of basketball theme stores decreased by 13 last year, the average price of footwear did not increase as the sales volume of running shoes increased. The income of basketball shoes seemed to increase.

Valuations are not high, but profit growth will be affected by promotional expenses.

At present, the company has a historical earnings ratio of about 9 times. After the dividend payout ratio increased to 75.8% last year, the interest rate rose to about 8%.

We believe that the R & D expenses will be maintained at close to XTEP and the current level, but we believe that it will increase track and field sponsorship expenses. This year's promotional spending will rise to 10%. In the future, expenditure will rise to 10% to 14% (Anta 2015:11.5%, XTEP 1H15:13.4%).

The company plans to increase 10-15 distributors in 2016, but the number of retail outlets in China remains around 6000.

In the absence of special spending requirements, the company's first 536 million old new allotment financing in the middle of last year would inevitably hurt the market's confidence in its corporate governance.