Net Profit Fell 691.31% But Rushed To The Daily Limit, Sanfo Outdoor Rely On Masks "Help"?

Masks may really become the "lifesaving materials" of some enterprises.

In April 16th, two days after the announcement of the 2019 annual results announcement, sports retail companies Sanfo outdoor said through an interactive platform that "masks business revenue in recent months will become an important part of the company's revenue". Among them, Jiangsu Sanfo, a wholly owned subsidiary of the company, currently has more than 10 masks production lines. In the production, more than 20 production lines have been purchased and installed. By the end of April and early May, there will be nearly forty production lines, mainly the KN95 production line.

In April 17th, Sanfo outdoor shares rose to 21.11 yuan, or 10.01%.

The good news from the mask has left the haze of decline in performance at a draught. Prior to April 14th, Sanfo outdoor has just released its 2019 annual performance bulletin. It expects the company to achieve a total revenue of 402 million yuan in the whole year, 420 million yuan last year, a decrease of 4.29% over the same period last year, and a net loss of 420 million yuan attributable to shareholders of listed companies. Sanfo said its performance decline was due to the provision of goodwill impairment and inventory depreciation. On the second day of the earnings announcement, Sanfo outdoor shares fell to 18.8 yuan, down 2.03%.

After the outbreak, Sanfo's outdoor ambitions for epidemic prevention products were revealed in March. In March 1st, Sanfo outdoor announced that Beijing Sanfo outdoor products Limited by Share Ltd wholly owned subsidiary of Jiangsu Sanfo outdoor products Co., Ltd. and Wang Geng, Beijing Nanqing Environmental Protection Technology Co., Ltd., Beijing, Beijing and Beijing Tianli Asset Management Co., Ltd. signed the "equity transfer agreement" in February 28, 2020. The company intends to give 0 yuan to the 65% of the shares. Right. After the equity transfer is completed, the company collectively holds a 65% stake in the nanoscale.

In the eyes of heaven, Wang Gengquan was founded in June 25, 2015 with a registered capital of 20 million yuan, which is controlled by natural person. It is a technology enterprise that develops nano environmental protection technology. It is committed to combining nanoscale technology with medical, environmental protection, sports and other industries. Its nano material coating, which is developed and produced, can be widely applied to mask products. It can play a long-term bacteriostatic effect and maintain masks to have good isolation ability for haze and particulates. As of December 31, 2019, the net assets attributable to the parent company were -8.62 million yuan, and the operating income in 2019 was 0 yuan, and the net profit attributable to the parent company was 10 thousand and 800 yuan.

0 yuan to buy masks business, in March 4th, the Shenzhen Stock Exchange issued a letter of concern, asked the company to explain whether it has the qualification of production, sales masks and medical protection products; production masks, medical protective products related equipment production preparation, planned investment amount and planned production capacity.

In fact, there are not many enterprises that turn to produce epidemic prevention materials during the epidemic. According to the data from heaven eye, from February 1, 2020 to April 13th, the business scope of more than 2.8 enterprises has added "mask, frontal gun, disinfectant, protective clothing, medical devices" and other related businesses. China has more than 8.5 enterprises in respirators and respirators, and more than 3.1 in February 1, 2020 to April 13th. Compared with the same period last year, the growth rate was as high as 2013.54%.

According to the China business daily, Sanfo outdoor has built factories in Suqian, Jiangsu. On the basis of investing about 30 million yuan, it continues to increase production equipment and expand investment.

Protective products exported overseas need to be locally certified. For example, the protective products exported to Europe need to be certified by the CE authorized by the European Union. According to the China business daily, Sanfo outdoor has three categories of mask products CE certification. This may also be their "expected masks business in recent months will become an important part of the company's revenue".

In recent years, Sanfo's outdoor performance can be described by ups and downs. In 2017, the operating income was 351 million yuan, a decrease of 0.53%, and net profit attributable to shareholders of listed companies was 12 million 908 thousand, down 136.49%. In 2018, it recovered, operating income increased by 420 million, increased by 19.62%, net profit reached 5 million 28 thousand and 700, an increase of 138.96%.

But as mentioned earlier, by the year 2019, business revenue and net profit were expected to slide both, and the latter would be reduced by 691.31%. Sanfo's outdoor "inventory depreciation reserve" in the cause analysis is indeed an important issue facing them in recent years -- inventory growth.

In the first half of 2019, Sanfo's outdoor inventory amounted to 181 million yuan, almost equivalent to the current operating income of 185 million yuan. Inventory growth also reflects weakness in sales and inventory management.

The established entity sports retailer, established in 1997, has experienced steady growth from 2000 to 2005. After the rapid development period after 2006, it has won tens of millions of investment in A in several well-known domestic investment companies including Qing Ke venture.

But then they encountered the impact of the electricity supplier. The outdoor industry itself has entered a period of adjustment. The "2017-2022 year China outdoor products industry market research and development forecast report" released by the foresight Industry Research Institute shows that after the golden period of development in 2009 ~2013, the growth rate of China's outdoor products market has slowed down gradually, and the industry growth rate has been lower than 10% by 2016. The 2018 China outdoor products market report released by ISPO shows that the growth rate of China's outdoor industry in 2018 was only 2.1%.

In recent years, Sanfo outdoor has been seeking transformation and upgrading, including the introduction of parent-child youth outdoor park project, increasing investment in its own brand and high-end brand. But at present there is no way to bring about real qualitative changes in the operation of enterprises. The first half of 2019 showed that its own brand revenue was 16 million 608 thousand and 400 yuan, accounting for 10.24%.

At present, its main business is three kinds: selling outdoor sporting goods, organizing outdoor events, activities, group building, and running parent-child outdoor parks. In outdoor sales, the revenue of store business in 2018 was 236 million yuan, accounting for 56.26% of the company's revenue.

Properly managed, it is a good self-help measure to transfer masks under the epidemic situation, but it can only serve as a transition in a special period. After all, whether it is sporting goods retail stores, or parent-child parks and outdoor events, there is no way to combine with epidemic prevention products.

At the same time, the epidemic also had a major impact on the outdoor tourism industry. According to the first quarter results announced by Sanfo outdoor in 2020, the net profit attributable to shareholders of listed companies was 13 million 500 thousand yuan to 14 million yuan in the first quarter, and 1 million 32 thousand and 700 yuan last year.

Besides mask, how to revitalize the main business is what Sanfo outdoor really needs to consider.