Seven wolves (002029): Revenue growth stabilizes, profit-bearing brand image upgrade accelerates
Investment highlights: Revenue growth in the first half of 19 6.
6%, terminal sales stabilized in the second quarter, and profits exceeded expectations.
1) The company’s revenue in the first half of 19 years increased by 10 years.
6% to 15.
500 million, net profit attributable to mother decreased by 8.
4% to 1.
2 ppm, deducting non-net profit by 15.
3% to 0.
2) Single-quarter revenue in the second quarter of 19 increased by 12.
4% to 6.
1 ‰, net profit attributable to mother decreased by 37.
7% to 31.81 million yuan. The revenue growth rate has increased from the first quarter. We expect that the same store in offline stores will recover slightly from the first quarter. Online channel sales will improve marginally with the growth of GMV ‘s growth centers such as Ali.
Gross profit margin increased, sales expenses increased rapidly, and the scale of inventory and accounts receivable was well controlled.
1) In terms of income statement, the company’s single-quarter gross profit margin in the second quarter of 19 was extended and increased3.
2 points to 47.
8%, mainly from the budget adjustment and optimization of this quarter, while some franchise stores were returned to direct sales; the sales expense ratio increased by 5.
4 points to 30.
4%, the advertising image of the airport and other channels expanded and increased, and the addition of direct sales instead of the terminal’s operating expenses; the total cost of management costs and research and development fell 0.
97pct to 12.
5%, net interest rate as a whole fell 4.
2 points to 5.
2) As for the balance sheet, the inventory size of the interim report decreased slightly to 800 million, the inventory size was well controlled, and the turnover was stable.
In Q2, the company accrued asset impairment losses of 3273 million, an increase of 1743 million compared with the same period of the previous year, and gradually accrued inventory impairment provisions of 5.
10,000 yuan, policy prudent asset quality consolidation.
Annual report receivables and bills 3.
5 ‰, down by 1 in the first quarter.
3) In the cash flow statement, the operating cash flow for the first half of the year was -1.
7 ppm, mainly due to the increase in advertising expenses and operating business service fees.
Product upgrades continue to advance supply chain optimization management and promote operational efficiency upgrades.
1) Focus on improving brand image.
The company released a new brand strategy to systematically sort out the core of the brand and promote the company’s internal team to better understand the brand concept.
In terms of brand communication, the company systematically carried out its own media operations, 淡水桑拿网 external media launches, creative activities, etc., and slightly promoted it, bringing attention to the seven wolves brand.
2) Product strength continues to increase.
The company continuously optimizes and adjusts the product process and version, and selects fabric accessories for different product series, improves product cost performance, and gradually forms a product drive to promote performance.
3) Refinement of the purchase chain.
The company strengthened its cooperation with strategic suppliers and high-quality suppliers with category advantages, vigorously promoted the centralized procurement of auxiliary materials, and at the same time reached a collecting ladder rebate with suppliers to continue to optimize production advantages.
In addition, the company has made great efforts to build a digital supply chain. Through the application of information technology and intelligent technology, the information of production, logistics, and sales transformation can be controlled visually, so as to improve the supply chain coordination ability and supply chain reaction efficiency.
Optimize channel structure, increase offline channel integration and improve overall efficiency.
1) Test online social e-commerce online.
While strengthening cooperation with mainstream e-commerce platforms, the company actively expanded and expanded sales channels for social attributes, and used social relationships and dissemination attributes to rapidly fission to achieve the effect of rapidly increasing distribution.
2) Upgrade of offline operations.
The company set up marketing subsidiaries, export management, strengthen the expansion of potential markets, and promote the transformation of problem customers.
In addition, the company also tried to build a digital store system, with face recognition, inspection monitoring, store heat maps, interactive screens and other application facilities, to explore a new retail mode of “person, goods, and field” digital identification and analysis, and enhance customer loyaltyDegree, increase member activity and conversion, and promote precision marketing.
The company’s asset quality is consolidated, and the current PB is only 0.
8 times, sufficient cash on the account, maintaining the “overweight” level.
The company operates steadily, with a current market value of only 4.5 billion. The total wealth management products and cash on the interim account exceed 41.
700 million, full margin of safety.
We maintain our profit forecast for 19-21. EPS are expected to be 0 in 19-21.
64 yuan, corresponding PE is 11/10/9 times.
At present, the company is actively cultivating emerging brands, constantly optimizing products, channels, and supply chains, and building a fashion industry group system. It is optimistic that the company’s operating trend is improving under the current gradual recovery of consumption, and maintains an “overweight” rating.
Risk warning: Consumption recovery is not up to expectations.