Urban Beauty "Lose" Old Bra, "Escape" Metropolis

Can urban beauty go through "darkest hour"?

A few days ago, the company delivered the worst performance since its listing: in 2019, it recorded a revenue of 4 billion 82 million yuan and a net profit of -12.98 billion yuan, down 19.91% and 443.13% respectively over the same period last year.

The company explained that it was a one-time reduction of old stocks and a waiver of customer arrears, provision for provision for debit receivables and closing costs. The total amount was nearly 1 billion 200 million.

A one-time large-scale accounting provision is equivalent to a one-time throw away the "burden". But will it be safe after that?

Zebra consumption noted that the company's main products bra, underwear and other products revenue has declined across the board. In the face of difficulties, the company plans to "return to focus on practical, functional and cost-effective products" to expand business to domestic low level cities.

Decline: over 2000 stores in 5 years

In the 2019 annual report released recently, the first Chinese urban beauty (02298.HK) of China undertook the "big event": the one-time use of 738 million yuan old stock, which directly led to a sharp decline in net profit to 1 billion 298 million yuan.

Why did it suddenly take stock up?

Zebra consumption combing found that this may be related to the company's performance in recent years continued to slump, the core product revenue decline is not linked, urgent need to light up.

Bra product is the largest core product of the company's revenue, and its income fluctuates significantly in recent years.

According to the data, from 2016 to 2019, the income of the company was 2 billion 40 million yuan, 2 billion 286 million yuan, 2 billion 504 million yuan and 1 billion 872 million yuan respectively, and the proportion of the contribution companies' income was 45.2%, 50.3%, 49.1% and 45.9% respectively.

Zheng Yaonan, the founder of WAL-MART security company in Shenzhen, still did not understand women's bra. Around 2016, a bra with no experience of steel wear was popular in the market. As a result, the company was questioned by the media whether it was "sealed" by a steel ring.

In 2019, the main product revenue declined. Core product bra revenue fell 25.24% year-on-year, while underwear, pajamas and home clothing and thermal clothing products decreased by 9.02%, 11.35% and 32.33%, respectively.

Although the company's products are not sold in the market, sales expenses continue to grow. In 2018 and 2019, the sales and marketing expenses were 1 billion 471 million yuan and 1 billion 631 million yuan respectively, representing an increase of 10% and 9.6% respectively.

In recent years, the company has been running all the way, shouting "Wan Dian plan", and now closed shop has become the norm.

Data show that in 2015, the total number of stores reached 8058. Since then, the number of stores has been decreasing year by year. From 2016 to 2019, the number of stores was 7651, 7181, 7305 and 5970 respectively. Over the past 5 years, the total number of stores has decreased by 2088. Over the same period, the number of employees dropped from 8800 to 3530.

In 2012, 3 years after Lin Chiling's endorsement, the company was the most impressive for several years. Its revenue scale increased by 700 million yuan a year and was listed on the stock exchange in 2014. The market value of the company has exceeded 18 billion Hong Kong dollars. It was Zheng Yaonan's high light moment and his personal worth reached 8 billion 500 million yuan.

As of March 26th, the market value of the company was less than HK $1 billion 900 million.

Under the ruthless hand: large scale accounting provision nearly 1 billion 200 million

In addition to the above 738 million yuan old inventory, the company also exempted the company's principal customers from arrears of 327 million yuan, the provision for provision for impairment of accounts receivable, 69 million yuan, and the closing shop cost of 52 million yuan, totaling 447 million yuan.

Urban beauty has done so hard for themselves, resulting in a loss of performance in the 2019 fiscal year. From another perspective, the company was able to fight easily after finding a big break.

However, the market has already been filled with the negative effects brought by the huge losses of the company.

Zebra consumption combing found that from 2016, the company's performance fluctuated frequently, and even sat on the roller coaster.

From the perspective of revenue growth, it was -8.90% in 2016 and 0.67% and 12.20% in 2017 and 2018 respectively, and fell into negative growth again in 2019. In the same period, the net profit of the company was also the same. From 2016 -55.19%, 2017 and 2018, it returned to 31.01% and 19.31%, and again fell into negative growth in 2019.

Looking back over the past 4 years, the company's revenue has been kept in the range of 4 billion yuan to 5 billion 100 million yuan, but net interest rate has been criticized for a long time. The scale of income is large and the actual profit is low. From 2016 to 2019, the net interest rates were 5.36%, 6.98%, 7.45% and -31.84% respectively.

The net interest rates of an Li Fang holdings and Hui Jie share are positive. From 2016 to the first half of 2019, the 01388.HK net interest rate remained at 4%-21% interval, and the net interest rate of 002763.SZ shares remained at 8%-13% interval.

The company mainly obtained most revenue from affiliate sales. From 2016 to 2019, the company sold 2 billion 520 million yuan, 2 billion 433 million yuan, 2 billion 801 million yuan and 1 billion 950 million yuan to franchisees respectively. The proportion of income from joining was down from 55.85% in the peak period in 2016 to 47.77% last year, and 8.08 percentage points in 4 years.

From the point of view of capital, the amount of funds on the company's books is relatively abundant. By the end of 2019, the company had 855 million yuan in cash and cash equivalents, and 455 million yuan in short-term debt and long-term debt. Over the same period, its asset liability ratio was 41.18%, an increase of 16.19 percentage points over the previous year.

Whether the bright city beauty can return to glory is concerned by the industry. It depends on whether the strategy of changing the top management team, changing spokesmen and the strategy of extending to the domestic low level cities is good.

Qixin Bao shows that the Guangdong city beauty Industrial Co., Ltd., a subsidiary of the company, not only designs, produces and sells clothing and underwear business, but also adds new non medical mask business in February this year.