Semir, A Casual Wear Giant, Gained 19 Billion 300 Million Of Its Revenue In 2019, But Its Net Profit Fell By 1 Billion 545 Million.

Zhejiang Semir apparel Limited by Share Ltd (hereinafter referred to as "Semir dress") released its performance bulletin in 2019 today (February 28th). During the reporting period, the company achieved a total revenue of 19 billion 358 million yuan, an increase of 23.15% over the same period last year, operating profit of 2 billion 158 million yuan, an increase of 3.74% over the same period last year, and the net profit attributable to shareholders of listed companies was 1 billion 545 million yuan, down 8.72% from the same period last year.

Semir clothing explained that the main reason for the increase in company revenue during the reporting period was mainly due to the rapid growth of children's businesses and the rapid development of online sales and the merger of French company SofizaSAS in 2019. The main reason for the company's net profit attributable to shareholders of listed companies was the acquisition and the influence of France SofizaSAS company, which was acquired last year. The combined cost is less than the fair value share of the identifiable net assets, resulting in a higher net profit base, and the loss of the company's current reporting period affected the net profit of the current period.

As of the end of the reporting period, the total assets of Semir clothing reached 16 billion 734 million yuan, up 1% over the same period last year, and the equity attributable to shareholders of listed companies was 11 billion 805 million yuan, up 5.92% over the same period last year, and the asset liability ratio was relatively low.

According to public information, Semir group was formally established in 2002. It is a conglomerate dominated by casual wear and children's clothing. It has two major brand clusters: adult casual wear represented by Semir brand and children's clothing represented by Barbara brand. Among them, Semir brand was first established in 1996, positioning young, fashionable, dynamic, cost-effective public casual wear, products are mainly oriented to 16-30 year old fashion trends, young people. The Barbara brand was founded in 2002, advocating professionalism, fashion and vitality, facing 0-14 year old children's consumer groups. The product is located in a middle-income family. According to Ou Rui data, the market share of Semir brand in men's clothing ranks ninth, 0.9%, and the market share in women's clothing ranks ninth, 0.6%, while the children's wear brand balbala ranks first in the market of children's wear, which is 5.6%.

According to the financial report, in 2018, Semir apparel achieved 15 billion 719 million yuan of business income, 1 billion 694 million yuan net profit, and revenue and performance in the past three years were 18.47% and 7.87% respectively. Meanwhile, the annual compound growth rate of revenue and performance in the past ten years was 16.81% and 14.34%, showing a fairly robust performance.

Zhang Junhao, an analyst at Guoxin Securities, has said that as a family owned Semir garment, its management and management concepts are advanced. In recent years, the amoeba management system has been promoted, and the partnership system has been improved. Specifically, Xu Bo, the current general manager of the company, entered Semir at the end of 1990s and graduated from the University. He started from the Marketing Commissioner. In 2002, the chairman of the company, Mr. Qiu Guang and Mr. Xu Bo, appointed the general manager of the Barbara Business Department, and equipped with a sophisticated entrepreneurial team. In addition, the company created the children's wear and marcard brand through the form of partners. The marcard brand is the first partner project of the company. The shareholding structure is controlled by the company. The general manager Wu shares 10%, the management team holds 10%, and some other business cadres share nearly 20%.

Since 2019, Mr. Xu Bo, general manager of the two core business departments of Semir clothing, Mr. general manager of Barbara Business Department and Mr. Shao Feichun, general manager of the electronic business department, have decided to purchase and hold Semir apparel stocks for a long time based on the confidence in the company's future development prospects and the reasonable judgement of the current stock value. In this context, Mr. Qiu Guang he, the controlling shareholder of the company, transferred to Mr. Xu Bo 5 million 371 thousand and 300 shares of the company's stock in the form of block trading in September 12, 2019, accounting for about 0.20% of the total share capital of the company, and transferred 2 million 685 thousand and 600 shares of the company's shares to Mr. Shao Feichun, accounting for about 0.10% of the total share capital of the company, and the average transaction price was 10.45 yuan / share. Thus further binding the interests of the core executives, conducive to long-term stable development of the company's business in the future.

The first textile network reported earlier that Semir dress was elected as the executive chairman of the Fifth Board of directors in January 2020, and Qiu Jianqiang was the son of the current chairman of the board. He once served as vice chairman of the board. The industry believes that the executive chairman of the executive board means the two generation of heads of people will gradually hand over to Qiu Jianqiang. Qiu Jianqiang as the 70 generation backbone generation, when he graduated from the China Europe International Business School EMBA, was awarded the honorary title of outstanding young entrepreneurs in Shanghai. He has been in the company for many years and has rich management experience. He is expected to lead Semir further.

At present, Semir's clothing business can be divided into two main parts, namely children's clothing business and leisure wear business. On this basis, the company has two main brands, that is, the cost-effective clothing brand "Semir" and "balabbara" children's wear brand. After years of rapid development, Semir brand has become the leading brand of local casual wear brand. Balbala brand occupies an absolute advantage in the children's wear market, and has been the first domestic market share for many years. In addition, the company attaches importance to the development of multi brand businesses. At present, a rich brand matrix is established through endogenous incubation, partner system, acquisition, agency and joint venture.

From the point of view of the acquisition business, in October 1, 2018, Semir fashion purchased the famous French children's wear Kidiliz group, holding its parent company SofizaSAS100% equity in the form of about 110 million euros in cash. The Kidiliz group is a leader in the high-end children's wear industry in Europe. It has 10 licensed children's clothing brands with a long history and distinctive characteristics, and 5 authorized ones that reflect the current fashion trend. Business brand.

In the first half of 2019, Kidiliz revenue was about 1 billion 483 million yuan, and its pre tax profit was -1.13 billion yuan. At present, the main business is still overseas, and has a large scale and volume of revenue in Europe, but its profitability is relatively poor. Zhang Junhao expects that the annual loss will exceed 200 million yuan.

From the point of view of the channel, the Kidliz line revenue accounted for 94.41%, of which the proportion of affiliation, direct operation and joint venture was 49.63%, 38.07% and 12.29% respectively. As of the first half of 2019, there were 757 stores, including 434, 43 of the direct, franchising and joint ventures (equivalent to joining the system, 10 thousand of the affiliates) and 280. At present, Semir clothing is optimizing its channels. In the first half of 2019, the number of Kidiliz stores was reduced by 25.

From the point of view of profitability, due to the relatively high-end positioning, Kidiliz group's gross profit margin is relatively high, gross margin is about 65.5% (Semir's overseas business is mainly Kidiliz group, so kidiliz gross margin is similar to foreign gross margin), much higher than Semir's main industry children's clothing gross margin level. However, because of the relatively high Kidiliz direct management and the high salary of managers, the cost rate is relatively high. In the first half of 2019, the pre tax profit rate of Semir's main business was 16.57%, while the pre tax profit margin of Kidiliz was -7.65%.

Judging from the synergy between Kidiliz and Semir children's clothing industry, Zhang Junhao judged:

1, Kidiliz group positioning high-end, which complements Semir's short board in high-end children's clothing, and its design and research capabilities are outstanding. All brands under the group emphasize product design creativity and have their own unique characteristics, so that the company's products have strong sense of design in children's clothing products. In the future, with the increasing trend of high-end and differentiated children's clothing, Semir will benefit from the layout of high-end and diversified styles.

2, Kidiliz group opened 11 procurement offices in 6 countries, and implemented global procurement in an all-round way to ensure that the products of the group brand have the most cost-effective products. This will reduce the procurement cost of Semir apparel at the supply chain end.

At present, although the Kidliz schedule will have a certain impact on the short-term profitability of the company, but with the integration of Kidiliz, the company will optimize its channel and reduce its investment in some inefficient brands, thereby rapidly and steadily improving its profitability, reducing its main business performance while strengthening its empowerment to domestic business. Semir apparel is expected to reduce its losses. It lasts for two to three years.

In Zhang Junhao's view, the revenue of Semir clothing in 2018 and the first half of 2019 has been growing at a high speed, not only benefiting from the Kidiliz, but also promoting the company's leisure wear industry. In the first half of 2019, the company achieved a revenue of 8 billion 219 million yuan, an increase of 48.57%, achieving a performance of 722 million yuan, an increase of 8.20% over the previous year, a net profit of 669 million yuan, an increase of 8.02% over the same period last year. After deducting Kidiliz business, its main business revenue was 6 billion 673 million yuan, with an increase of 21.47%, and its performance estimate increased by 25%, and remained strong. It can be seen that since Semir's apparel revenue bottomed out in 2012, it gradually began to stabilize and pick up. From the perspective of earnings growth, the company's performance growth fluctuated greatly, which was mainly caused by the loss of inventory price, the increase in the rate of fees and the impact of Kidiliz.

In addition, data show that as of the first three quarters of 2019, the total number of domestic stores in Semir clothing was 9582, representing a net increase of 178 compared with the first half of 2019, with 5682 children's clothing stores, a net increase of 136 yuan, and a major contribution to the store. There were 3900 casual wear shops and a net increase of 42. In addition, Semir clothing has reached a strategic partnership with quality enterprises such as Wanda, and can get a better location. At present, there are about 100 stores in the Wanda shopping center, and the retailing is in good condition. As the company gradually opens the store standard in the future, it is expected to attract more franchisees to enter the shopping center. Semir brand is expected to grow two times.