Resurgence Of The Main Industry And The Revival Of Sports Industrialization

In the first quarter of the year, the noble bird group gained a good profit, and the main business was revival. Meanwhile, the sports industry group continued to push forward the development of sports products.

15 years of weak performance recovery, 16Q1 income flat

In the 15 year, the company achieved operating income of 1 billion 969 million yuan, an increase of 2.57% over the same period, and a net profit of 332 million yuan to the parent company, an increase of 6.28% over the previous year, EPS0.54 yuan, 10 yuan 4.5 yuan.

The net profit was 279 million yuan, an increase of 0.74% compared with the same period last year, which was lower than the net profit growth rate, mainly due to an increase of 25 million 70 thousand in government subsidies.

15Q1-Q4 single quarter revenue increased by -5.50%, 11.80%, 12.06%, -2.39%, net profit increased 0.62%, 11.26%, 9.73%, 5.42%.

The net profit growth rate of 15Q4 is higher than that of revenue, mainly due to the increase in extra business income.

Company positioning for three or four lines and

The adjustment started later than the industry and began to resume growth in the 15 years.

16Q1 income increased by 0.37%, net profit increased by 7.23%. Net profit growth was higher than income, mainly because the loss of assets impairment was reduced by 26 million 70 thousand yuan.

Channel adjustment continues under the "retail oriented" strategy

(1) the total number of channels in 15 years was 4465 (one or two, three or four lines accounted for 9%, 19%, 37% and 35% respectively; East China 28%, southwest 20%, central China, Southern China, Northeast China, North China, northwest), compared with the net decrease in the year, the extension was reduced, and the main business was to join the stores.

The number of closed stores is 261 more than that of the beginning of the year, mainly due to the company's "retail oriented" business policy, which has increased the adjustment of stores.

16Q1 stores 4388 (one or two, three or four line accounted for 9.5%, 19.37%, 37.19%, 33.93%), 71 newly opened, 148.

(2) in terms of products, clothing and accessories revenue declined by 2.87%, 4.14%, and shoes products increased by 7.34%.

(3) the growth rate in Northwest and southwest China is 34.64% and 8.13% respectively. In Northeast China, East China, North China, Southern China and central China, -18.11%, -12.82%, -4.98%, -4.6% and -0.36% decrease respectively.

(4) from the volume and price point of view, clothing sales increased by 1.94%, the price dropped by 1.64%, sales of shoes increased by 2.98%, prices 1.10%, sales of accessories decreased by 5.72%, and the price dropped by 0.33%.

Increase in gross margin and cost increase, inventory improvement

Gross profit margin: the gross profit margin increased from 4.18PCT to 45.20% in 15 years, mainly due to cost control and proper price increase.

Among them, the gross profit margin of clothing increased by 5.02PCT to 46.71%, the gross margin of shoes increased by 3.74PCT to 44.31%, and the gross margin of accessories was reduced from 1.89PCT to 33.63%.

The gross profit margin of 15Q1-16Q1 was 44.58% (+5.97PCT), 47.63% (+4.80PCT), 40.65% (-3.07PCT), 46.75% (+6.40PCT) and 42.81% (-1.77PCT) respectively.

Cost rate: the cost rate increased from 2.54PCT to 22.82% during 15 years.

The sales fee rate increased by 0.24PCT to 10.31%, and the main advertising expenses and order meeting fees were increased. The management fee rate increased from 0.07PCT to 7.63%, mainly due to the increase in R & D expenses and employee pay benefits. The financial cost rate increased by 2.22PCT to 4.89%, mainly due to the interest expense paid by the company issuing corporate bonds.

15Q1-16Q1 sales expense rates were 6.42% (-4.82PCT), 11.02% (+1.45PCT), 15.43% (+2.11PCT), 9.80% (+2.39PCT) and 6.54% (+0.12PCT) respectively, and the management fee rates were 6.12% (-0.68PCT), 8.36% (-0.08PCT), 9.10% (-1.94PCT), 7.37% (+1.85PCT), 6.73% (+0.61PCT) respectively, and the financial cost rates were 5.17% (5.17%), 5.17% (5.17%), 7.37% (5.17%), and (()), respectively.

Other

1) at the end of 15, inventories dropped 19.07% to 171 million compared with the beginning of the year, mainly due to the late spring festival in 2015, and the corresponding delay in the delivery time in spring, resulting in a larger inventory balance at the end of 14 years, of which inventory / income was 8.67%, inventory depreciation / inventory was 7.19%, and inventory turnover was 5.65.

At the end of 15, the proportion of inventory commodities in inventory was 56.51%, down 12.79PCT from last year.

16Q1 inventories fell 33.18% to 114 million, mainly in terms of product sales.

2) accounts receivable decreased by 4.95% to 1 billion 222 million compared with the beginning of the year, mainly due to strict enforcement of accounts receivable management system and timely recovery of accounts receivable.

16Q1 accounts receivable increased by 27.26% to 1 billion 556 million compared with the beginning of the year.

3) asset impairment losses increased by 324.65% to 49 million 550 thousand over the same period last year, including losses in inventory losses and bad debts increased by 16 million 620 thousand and 21 million 260 thousand respectively. 16Q1 asset impairment losses fell 74.87% to 8 million 750 thousand over the same period last year.

4) operating income increased by 54.25% to 71 million 980 thousand over the same period, mainly due to the increase in government subsidies; 16Q1 operating income increased 375.63% to 890 thousand, mainly due to increased government subsidies.

5) investment income increased by 616.47% to 3 million 690 thousand yuan over the same period, mainly due to long-term equity investment income increased by 2 million 350 thousand yuan; 16Q1 investment income was 0 yuan.

6) net cash flow from operating activities increased by 517.98% to 599 million over the same period last year, mainly due to the decrease in cash flow from operating activities caused by the decrease in the amount of suppliers' cash deposits and the payment of taxes and fees. The net cash flow of 16Q1 operating activities was -2.78 billion, up 2.06% over the same period last year.

Big sports ecosystem continues to promote and widely invest in sports industry chain.

Since 2014, the company has established the goal of strategic pformation and upgrading, upgrading from "traditional sports shoes and clothing industry" to "sports industrialization group based on sports apparel manufacturing and coordinated development of various sports industry forms".

In December 2014, with the cooperation between China and Europe, the European Union investment was established. In 2015, the sports industry layout of the company was launched in a comprehensive way. It has already involved many fields such as sports operations, sports brokers, sports services, sports training and other fields, and basically completed the layout of sports industry in all fields, laying the foundation for achieving the goal of sports industrialization group.

All of them are used for pfering tiger shares and increasing money for tiger pads, making it the second largest shareholder, accounting for 16.11%. The company has established strategic cooperative relations with Hu Po sports and established sports industry fund capital domain (total size 2 billion). The company currently invests 400 million yuan in mobile capital. The capital investment has been completed for the investment of intelligent sports, such as lemon honey information, running pleasure music, Hui people's music, green orange science and technology letters, Zepp, Xinghe interactive, super gorilla, free zone, Heike Lis, Yun Zhiyuan, dares to play, SOCCERDOG, mobile rabbit and other 14 Internet + concepts, including sports, fitness, education and training, value-added services, intelligent hardware and software, and many other sports service industries. 1) invest in tiger pads and jointly set up sports industry fund capital: the company has invested 240 million yuan in investment from Chuanxiang investment to Chuansheng investment.

By the end of 15, mobile capital held 418 million 263 thousand and 400 yuan for the sale of financial assets. According to the latest round of financing valuation of the investment projects, the above 14 projects have realized 113 million 478 thousand and 800 yuan of comprehensive income.

2) increase the capital of the Spanish football brokerage company BOY: Hongkong bird (the company invested 150 million yuan to set up, for the company's external investment and financing platform) to increase the amount of 20 million euros to increase the Spanish football brokerage company BOY, accounting for 43.95%; Hongkong has BOY to the first phase of the investment 5 million euros and provides 5 million euros of its profit sharing capitalization loans, after the completion of this investment, Hongkong has BOY30.77% stake, BOY actively participated in the 2016 Super League winter pfer, gradually began to set foot in the domestic players pfer market, and BOY is also promoting cooperation with other European brokerage companies in order to better serve the club and players.

BOY forecasts a pre tax profit of 2 million 700 thousand euros in 2016, and 10 million euros in 2017 and 2018.

3) signed a cooperation framework agreement with the general association and China Sports Association to enter the campus sports industry: in May 21st, the company signed a cooperation framework agreement with the general association, the Chinese Sports Association, tiger and Eunice, and jointly established a sports operation company to organize campus sports events through the general association and the China Sports Association to promote the development of campus sports in China. A sports brokerage firm was established to serve the student sports talents, coaches and referees.

The company invested 135 million 222 thousand and 100 yuan in capital contribution to Kangpai (Beijing) Sports Management Co., Ltd. after its completion of capital increase, accounting for 37% of its registered capital. The company invested 8 million 114 thousand and 200 yuan in the joint venture with China Sports School limited liability company, Eunice and tiger pits (Beijing) sports Consulting Co., Ltd., which invested 8 million 114 thousand and 200 yuan, accounting for 37% of the registered capital of the proposed company. Quan Xiang investment has signed investment agreement with Chuen Sheng investment, and the investment center of Chuang Xiang has provided a loan of 65 million 250 thousand yuan to Chuen Sheng Investment. Chuen Sheng investment has used this loan to increase its capital for Kangpai (Network) Technology Co., Ltd., and has 30% of its shares after increasing capital, and is listed as its largest shareholder with China school sports limited liability company. In order to promote project implementation,

The company has established three companies, such as general association and tiger pun, and has set up the Chinese university student marathon league tournament, the campus cup, the Chinese university student seven person soccer league tournament, the national university student 3 pairs 3 basketball league tournament and so on.

Increase by 1 billion 500 million, expand production and build a sports cloud platform

In November 21, 2015, the company announced a fixed increase plan. After the announcement of the March 10, 2016 announcement, the plan was set up: no increase of more than 66 million shares, no more than 1 billion 541 million yuan, investment in supply chain construction (551 million yuan), sports cloud platform construction (531 million yuan), repayment of bank loans (460 million yuan), and the lock up period of 1 years, which has been accepted by the SFC.

This increase will help: (1) expand garment production, improve order efficiency, and promote the industrialization of independent research and development; (2) use the Internet big data to aggregate the resources of large sports industry ecosystem.

Through the construction of sports cloud platform, the company will conduct a comprehensive precipitation, application and deep excavation of mass sports data, and integrate existing and expanding sports industry resources in the ecosystem circle to form an integrated data platform serving the company's business.

In terms of project efficiency, the construction period of the supply chain construction project is 3 years, and the average annual income is 926 million yuan and the net profit is 92 million 463 thousand and 700 yuan. The sports cloud platform project does not directly create economic benefits.

In the past 16 years, the main brand continued to upgrade its retail orientation.

In the 16 year, the company will continue to promote the strategic upgrading of the sports industrialization group, promote the upgrading of the brand business from "wholesale mode" to "retail oriented" business, do more sports shoes and clothing industry, expand the sports industry, adhere to the goal of "fully meet everyone's sports needs", and achieve the investment income and continuous operation through the "big industry ecology + multi product operation" mode.

1) continue to promote the company's sports industry to expand, that is, the sports industry with huge participation, huge consumption potential and huge development space as the core, focusing on the hot spots of sports enthusiasts' consumption, guided by professional events, promoting sports industry with the promotion of group events and activities and sports goods consumption.

To grasp the favorable opportunity for China's Super League to continue to be hot, to help BOY set up a professional team to serve domestic and international clubs and players better; b) campus sports: developing sports events on campus based on the existing campus marathon and college student seven person soccer league matches; c) sports technology: investing in domestic and foreign sports technology companies by investing in the capital domain built with Tiger flutter; d) investment in sports industry chain: continue to strengthen the layout in sports fitness, sports camp, sports games, sports nutrition, sports tourism, sports brokers, sports equipment, sports insurance and other fields through mergers and acquisitions, so as to create a complete sports industry ecological chain, and it is expected to partially land in 2016. A) football field:

2) continue to promote the company's sports shoes and apparel industry to do more, that is, based on the brand of "noble bird", take sports as the core and take the international professional sports brand as the target, actively develop into a multi brand, multi market, multi-channel sporting goods company.

In terms of multi-channel, the company will promote the layout of sports shoes and clothing line and online channels, acquire high-quality channel resources through various ways such as acquisition and self construction. At the same time, it will create a new consumption experience for consumers through integrating excellent online and offline resources. On the basis of multi brand operation, international famous brands, especially the famous sports shoes and clothing brands in the field of subdivision, will be introduced through brand acquisition, brand authorization and brand agency, so as to provide consumers with richer products.

3) maintain the healthy development of the brand business.

We will continue to adhere to the "retail oriented" = subdivision product professional positioning + strengthen the terminal shopping experience + partner consultant type to participate in dealer channels throughout the whole year. We will continue to strengthen the sports attribute of the "noble bird" brand, take the three sports of running, football and basketball as the core, integrate media communication and sports resources, and further enhance the influence and consumer experience of the brand by continuing product innovation, self running events upgrading, establishing a brand running group, sponsoring the campus marathon League, and the campus seven person soccer league tournament. At the same time, we choose to start the acquisition of distributors' channels at the right time, expand the proportion of self operated stores, and further enhance the performance.

Strategic pformation of sports industrialization group, share the domestic sports industry development dividends, maintain "buy" rating

China's sporting goods industry has been in a recovery period after a deep adjustment, and with the upgrading of consumption and the enhancement of national fitness consciousness, sports goods consumption has escalated from conceptual consumption to experiential consumption.

At present, with the support of national policies for the sports industry, the domestic mass sports are expected to experience the process from scratch, creating opportunities for every subdivision of the big sports industry.

The pformation of the company to build a large sports ecosphere, to create sports industry group, to achieve the layout of the whole industry chain of sports industry, is expected to benefit from the strategic development opportunities of China's sports industry.

The company expects to achieve 2 billion yuan revenue in 2016, with a cost control of 1 billion 600 million yuan and 200-300 terminal stores.

We believe that: 1) the main industry has achieved a weak recovery in the past 15 years, and the company has continued to

"Oriented", the R & D development (15 years' R & D investment increased by 17.13% year-on-year), brand marketing, terminal sales ability, and sports goods experience consumption trend will continue to recover; 2) the sports industry layout, the company's outstanding partners in the joint industry BOY, tiger, general association, China Sports Association, etc., with the help of capital strength to jointly develop the sports industry chain, with the growth of the sports cloud platform construction, it is expected to form a strong synergy effect to achieve the goal of the company's sports industrialization group.

3) the 16.4.26 announcement will not exceed 1 billion yuan in the registration and issuance of non-public directional debt financing instruments, and it is intended to register no more than 1 billion 500 million yuan for ultra short term financing bonds to supplement working capital. The company is currently investing in a larger scale and the future M & A is expected to remain strong.

4) the first phase of the ESOP was completed in September 2015, and the average price was 22.48 yuan / share, with a lockup period of 2015/09/25-2016/09/24.

5) the announcement of 2016.1.14 company was once again recognized by high-tech enterprises and enjoyed 15% corporate income tax.

According to the main business situation, the adjustment will be EPS to 0.57, 0.61 and 0.67 yuan in 16-18 years (if the increase will be diluted by EPS).

At present, the valuation is high, but with the development of mass sports and the continuous deregulation and support of national policies, the catalyst will continue to emerge. The theme of sports will continue to be a hot spot in the future. The company sports layout is more comprehensive. We will continue to look forward to the future sports industrialization group strategy and the gradual introduction of subsequent mergers and acquisitions to maintain the "buy" rating.