Urban Beauty Promised Fosun That Net Profit Will Increase By 20%.

According to the world clothing shoes and hat net, in Hong Kong share consumption stocks,

(02298) the curve that has been painted over the past month is as beautiful as his spokeswoman, sister Lin Chiling.

The stock started a wave of inflation in early May, rising by 47.8% in just 14 trading days.

Nearly 50% of the gains came from the old fashioned, dynamic and cheap urban beauty (02298), which again gave investors hope in 2016.

Although the 8.9% decrease in revenue and 55.2% decrease in net profit is not a good figure from data, but Fosun shares become the two shareholder.

The market closes 958 stores in the second half of 2016. Every incident seems to imply that the urban beauty will have a big move immediately.

In June 20th, city beauty held an investor telephone conference. The company CFO and investors introduced and communicated the company's operation since the beginning of the year.

According to urban beauty CFO Lu Kangcheng, the urban beauty has two goals this year, one is rebounding in profits, the other is due to poor performance last year, resulting in the accumulation of more inventory. The company strives to deal with some inventory this year.

The following is Lu Kang Cheng's speech:

On many occasions, we have said that this year's revenue is expected to be higher than that of last year. We still have a lot of changes, but we actually have many reforms, but why do we still have a lot of reform? Why did we say that it was only a little higher than last year? Because last year we closed down a lot of loss shops and inefficient stores, and these stores actually had sales. For this reason, this year's sales will only increase slightly. The other thing we should pay attention to is our opening time. We have said in many public occasions that this year's shop will still maintain about 200 shops, but the time is mainly in the following six months, because then we will have many new products to launch, so many of our franchisees have already applied for a shop. We

So from the time node, we still have a closed shop in the first quarter, flat in the second quarter, and open shop in the third fourth quarter, so the first half of this year will be a closed shop, but the whole year will be a net shop.

Sales in the same store fell 1-3 months, 4 and May were roughly flat. But considering the new products in the second half of the year, the same store sales in the whole year are expected to be flat and likely to rise slightly.

We should also notice that we will continue to start overseas sales, possibly Southeast Asian countries, overseas.

This is not covered before.

This is about sales. What is the rate of charge and gross profit margin? We will impose a stricter control over costs this year, so the cost will drop in the first half or the second half.

If we look at the gross margin, we will see that there is not much change in the gross profit margin of our normal sales. On the one hand, because of various benefits brought about by the reform of the channel, on the other hand, there is a slight increase in the price of raw materials. Therefore, the two factors will offset the gross margin.

But another thing to note is that we have just begun to clean up some old stock. If we clean up the stock, the discount rate will be greater. The gross margin will be affected. So the gross margin will be down as a whole.

When it comes to cleaning up inventory, we should also remind you that we believe that at the end of 17, our inventory will definitely be lower than 16 years, but inventory will not necessarily return to the level of 15 years at a time. It is also because we hope to have a rebound profit, so there will be a balance in the Qing Dynasty.

Therefore, it is not certain that the inventory at the end of the year will be lower than that in 15 years, but it is lower than that in 16 years.

But mid term is not necessarily in the middle. Why? Because just now we have said that we will have some new products, our franchisees have made many orders, so the stock will arrive at our warehouse before the end of June, but it will not be sold to our franchisees until July. So the new inventory will offset the old stock we cleaned up in the first half of the year.

Many people are asking me, "where is the balance between a profit rebound and cleaning up inventory?" in fact, this balance is hard to say, because it is expected that the performance in the second half of this year will be better than that in the first half of the year, so we will not rule out the promotion of old stocks when the new stocks are selling well.

But anyway, one thing to note is that the major shareholder has signed a promise with Fosun Group that the profit in the 17 years will be increased by at least 20% than 16 years. If this commitment is not reached, the majority shareholder is going to pay his own money to Fosun, so we will not touch the bottom.

Q&A

What is the demand and structure of the industry in Q:2017?

A: micro business has had some impact on us in the second third quarters of last year, but this effect has weakened in the fourth quarter. In the fourth quarter, the proportion of micro dealers in the industry has dropped to a low number of units, now even lower, so the impact of micro business has passed.

We see that the whole industry and the concept of what happened last year did not happen too much. There was no rebound and no further decline.

Q: as for the new products, you just said that the channel reaction is very good now, so are there any specific quantitative figures? How about the progress of our shopping center?

A: in April 8th, we brought a lot of investors to visit our headquarters. People who came here should feel good. At least, we have a good improvement in our previous products.

But most of our products have not yet been launched, so there is no data available.

The shopping center shop is also scheduled to open in the second half of the year.

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Q: where do we see the value of China's Fosun?

A: it is not yet seen now that Fosun is very experienced in mergers and acquisitions and shares. In the future, there may be some opportunities for mergers and acquisitions in Fosun to be introduced to us. Conversely, when we have such opportunities, we will listen to Fosun's comments.

In addition, we also hired Roland Begg, a consultant company, to provide us with a strategic opportunity for 5 years. Fosun also participated in the conference and offered some suggestions.

Q: we see whether it is the introduction of Fosun or Roland Begg, including the introduction of your joining the company, and the addition of 12 executives who are introduced from outside. What changes has taken place in the management of the company after the management changes?

A: the main reason is that internal communication has become stronger. In fact, the reason why we didn't do well last year was that we didn't detect the market changes in time. This is what our sales and marketing colleagues did not do in market research.

Besides, why do we stock so much, and there is not enough communication between sales and supply chain, but this year, department communication will be strengthened and procurement will be more flexible.

Q: will the cooperation with Japanese children's clothing brands be promoted in all stores this year? Or is it just a selection of some stores to test the water?

A: the contract was signed in May. It has just started recently. And we are not sure whether the product can be sold. So at present, it is only testing the water on the electronic business platform. If it sells well, it will only join the line. This year, it should only be sold in the electricity supplier.

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