Lining'S Brand Competitiveness Reinventing, New Brand Promoting Revenue Growth

According to the world clothing and shoe net, Southwest Securities issued a research report, taking into account that

(02331) performance reverses expectations and new business or brings faster growth, giving the company 23 times earnings and target price of HK $7.45 in 2018, covering for the first time and giving "overweight" rating.

Former sporting goods, performance recovery trend established

The bank pointed out that Lining was an early start sporting goods company in the mainland.

There is a high degree of recognition.

After the industry crisis in 2012, the company lost 3 consecutive years due to the wrong location.

In 2014, Lining took charge of the company and reformed the product positioning, channels and operation management. The company turned losses into profits in 15 years.

In the first half of 17 years, revenue increased by 11% to 3 billion 996 million yuan, net profit rose 67% to 189 million yuan, net interest rate increased 1.5 percentage points to 4.7%, and the performance recovery trend was established.

(since the net profit in 2016 contains profit from the red double happiness segment of the discontinued business, the net profit in 2017 has a negative growth. If deducting part of the profits from the termination of operation, the actual net profit in 2016 is 255 million 500 thousand yuan, and the actual growth rate is 87.6%.

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Lining's brand competitiveness reinventing, new brand promoting revenue growth

According to A.C.Nelson's survey report, consumers choose to pay more attention to experience value when choosing products.

Lining starts from product experience, consumption experience and event experience, and re establishes brand competitiveness.

From the product perspective, the diversification of product types and grades can meet different sports needs of consumers, such as running products for professional runners and ordinary runners to create a variety of running shoes matrix, basketball products will combine functions with fashion, close to professional and daily needs.

In addition, the consumption experience has been further upgraded, focusing on the development of efficient shops and category stores, focusing on promoting the store's running Corner and Lining iRun club construction to better consumers.

Experience and follow-up services.

In addition to using spokesperson marketing and event marketing, we also pay attention to online live marketing.

For example, during the 10 kilometer running League of Lining, the influence of online live broadcasting will be expanded, and the sales will be increased by directly driving the runners into the electricity suppliers.

New products sold for 6 months increased by more than 4 percentage points.

Through cooperation with the professional dance brand Danskin of the United States, Lining reclaimed the agency power of Lining's children's clothing and arranged the market for women and children. It is expected that the next year will bring some contribution to the income.

Double reform of retail channels and continuous improvement of operational efficiency

The company said that the company will continue to promote efficient shop strategy (200-300 square meters), set up experience shops in the core business district of the city, pass the brand value.

We should speed up the closing speed of inefficient shops and loss shops, and make up for the loss of these stores by increasing the development of online channels.

In addition, we should make full use of the self media attributes of online channels to enhance the conversion rate of users through live broadcast of events.

The development of Direct stores and online channels can provide companies with more accurate consumption data, and provide better data support for product planning and supply.

Strengthen the factory's direct allocation capability to stores, shorten the distribution time and improve the overall operational efficiency.

The rising proportion of new products in the channel and the decline in the inventory cycle can effectively drive up the gross margin.

Based on the above, the bank gave Lining a "buy" rating, but it is worth noting that the bank should pay attention to the continued risk of cost increase and the risk of increased competition in the industry.

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