Lining'S Profits Improved Last Year.

Recently, Lining Sports Products Co., Ltd. (hereinafter referred to as "Lining") issued a performance report that it achieved a revenue of 13 billion 870 million yuan in 2019, an increase of 31.85% over the same period last year, and a net profit of 1 billion 499 million yuan to the parent company, an increase of 109.59% over the same period last year. It deducted a net profit of 1 billion 266 million yuan from the one-time business related profits and losses, an increase of 77% over the previous year, exceeding the market expectation.

Lining's performance last year maintained a high growth. According to Fangfeng's Feng Yi team, in 2019, the company benefited from accelerated expansion, channel transformation, and the same store's continuous upgrading, and revenue grew by 32% year-on-year. Net profit increased rapidly due to higher gross profit margin, lower expense rate and higher one-time benefit.

Same store grows rapidly, channel structure optimization

In terms of channel management, 2019 of the whole year's running water (including online and excluding children's wear) increased by 28% compared with the same period in 2018 (15% in 2018), while the line's flow increased by 26% (11% in 2018), while the same store's growth rate was less than 20%, and the online income rose by more than 40%. In terms of the number of channels, the growth rate of the total stores in 2019 reached 5.8%, of which Lining brand Direct stores, distribution stores, and Lining young increased by -16.4%, 6.6% and 38.3% respectively. The main reason for the decline of the direct store was the direct transfer of the company, and the rapid growth of Lining young and China Lining stores. In terms of category, running, training, basketball and sports flow decreased by 1%, 15%, 45% and 52% respectively. Core sports fashion (32%) and basketball (28%) increased to 60% (only 50% last year).

The impact of the epidemic, the company's 1 quarter of the pipeline is expected to decline more than 20%, compared with other domestic leading brands relatively small impact, the external cause single brand, multi category, multi-channel, overseas business is limited, the global epidemic spread has limited impact on the company's performance.

Fangyi Textile Group Feng Yi team expects 2020, 2021, and 2022 net profit to 15.01, 20.10 and 2 billion 381 million yuan respectively, up 0.12%, 33.89%, 18.50%, corresponding to EPS 0.61, 0.82, 0.97 yuan / share, corresponding to P/E for 0.97, 0.97, and "strong recommendation" rating.

In terms of risk, there are three hints: (1) the economic downturn exceeds expectations; (2) the global epidemic control is not as good as expected; (3) children's wear and Lining's business revenue growth is not as good as expected. Author: Fang Yi Fang Feng Yi team