Retail Sales Of Domestic Down Garments And Bosideng Warm Winter Conditions Remain High

In January 7th, Bosideng International Holdings Limited (hereinafter referred to as Bosideng) announced that the cumulative retail sales of Bosideng brand recorded an increase of more than 30% in the first nine months of 2019/2020 fiscal year (April 2019 -12 months), while the total retail sales of other brands increased by more than 40% over the same period.

Fangyi Textile Group Feng Yi team analysis expects Boston 2019-2020 financial year performance in line with expectations:

(1) retail sales remain high under warm winter conditions: this year, the company has put forward second years of "focusing on main channel, focusing on the main brand and shrinking diversification strategy", and continues to upgrade brand image, channel construction, product innovation and retail operation. Since November 2019, on the one hand, there has been "warm winter" in all parts of the country. The "warm winter" phenomenon in East China and central China in the proportion of over 50% of the company's stores is obvious. On the other hand, the domestic textile and garment industry has shown a weak trend in the second half of the year, but the company's brand down clothing business has maintained a relatively high growth. In the first nine months of the 2020 fiscal year (April 2019 -12 months), the total retail sales volume of Bosideng brand and other brands grew by more than 30% and 40% over the same period.

(2) the company continued to buy back to show its confidence: the company announced the share repurchase plan in December 20th, and the planned number of repurchase shares does not exceed 10% of the number of shares issued in August 26, 2019, showing the company's confidence in its own business development prospects. The Company repurchased several times on December 23rd, 24, 27, 30, 31, and January 2nd, 3, and 6, respectively. Up to now, 43 million shares have been repurchased, accounting for 0.401% of the shares issued in August 26, 2019.

Core logic: the main brand continues to upgrade, and the channel structure is gradually optimized.

The company launched in 2018 focused on the main channel, focusing on the main brand, shrinking diversification strategy, eliminating diversified clothing business, vigorously developing down garment main industry, and a number of recovery and reform measures to promote the upgrading of products, marketing, channels and supply chain. The 2019 fiscal year revenue and net profit of the parent company reached 103.84 and 981 million yuan respectively, up 16.84% and 59.4% compared with the same period last year.

(1) product side: functional trend fashion trend, enhance the price band. Bosideng's main brand, on the one hand, has launched the fashion week series products, cooperative artists and Hermes designers for two consecutive years in the international fashion week. On the other hand, it has gradually increased the price of products. The sales volume of products under 1000 yuan and more than 1800 yuan increased by -35.4pct, 19.3pct to 12.1% and 24.1% respectively, and the 1000-1800 yuan main price increased by 63.8%.

(2) marketing side: fashion marketing resources are further strengthened. In 2019, he continued to enter the fashion week of Paris. She signed a famous actress Yang Mi as a spokesperson for the designer. He also worked with international film stars, Tom, Johnston and Scarlett, Johnson.

(3) channel side: increase the proportion of self owned stores, add shopping center stores, shopping center stores accounted for double digits, Future Ltd will gradually increase the penetration rate of shopping centers, and predict that the number of shopping centers in the next two years will reach 30% of the total number of outlets. The electricity supplier has continued to grow at a high level, and the double eleven show brightest.

(4) supply chain end: two weeks quality quick response. The order of the down jacket of the company can be formed through the rapid replenishment of the pull type, the rapid increase of new products, and the quick turnover of small bills. The peak sales season can also achieve a two week quality quick return supply, effectively improving the rate of goods sold out and reducing the risk of inventory.

In terms of investment proposals, Fang Yi Fang Feng Yi Group expects that the net profit of the company in 2019/2020/2021 is 13.49/17.23/21.49 billion yuan, the growth rate is 37.5%/27.66%/24.74% in the same period, corresponding to P/E is 23/18/14, giving the "recommended" rating. In addition, the team also said that the progress of the buyback was not as good as expected, and that the market accepted less than the expected price.

Author: Fang Yi Fang Feng Yi team