Peacebird (603877): weak demand overlaps high base 19Q1 performance is lower than expected

Peacebird (603877): weak demand overlaps high base 19Q1 performance is lower than expected

In the end, the company’s product design innovation continued to improve, with a personalized style and a youthful adjustment gradually recognized by the market; the application of the TOC system helped improve the efficiency of the supply chain, the optimization of the terminal channel structure, and the enhancement of management and control capabilities.

However, affected by weak terminal demand and a high base, revenue and net profit declined in 19Q1, respectively.

46% / 34.

90%, lower than expected.

Taking into account that the base number will be reduced in the later period and the company’s refined operation capabilities will be expanded, it is expected that the later performance will resume its 北京夜网 growth trend.

The current market value is US $ 9.1 billion, corresponding to 19PE14X / 20PE12X. It is estimated that it is not high.

The high base and weak demand led to a slight decrease in revenue in 19Q1; affected by the increase in the expense ratio greater than the increase in gross profit margin, the decrease in income from disposal of assets, and the decrease in net profit by 35%.

In 19Q1, the company’s revenue fell 4 year-on-year.

46% to 16.

5.9 billion; operating profit and net profit attributable to mothers have decreased by 28 each year.

87% and 34.

90%, net profit after deducting non-attribution to mothers fell by 65.

37%; profit achieved 0.

18 yuan, lower than expected.

The brand’s young fashion style was successfully adjusted, and the TOC system helped improve supply efficiency; 杭州夜网论坛 however, the sluggish demand and high base caused a slight shift in 19Q1 revenue.

1. Sub-channels: 1) Offline: 19Q1 offline revenue declines by 5 every year.

90%, in terms of extension, at the end of 2019Q1, there were a total of 4,508 stores in the company, and 86 were closed earlier.

In terms of model, direct sales revenue has dropped by 0 every year.

81% to 8.

7.3 billion, directly operated 34 earlier net openings.

Franchise continues to be under pressure, with revenue falling by 17 per year.

.

45% to 3.

1.2 billion yuan, 120 stores closed earlier than the net.

2) Online learning: Affected by the weakening of the traffic dividend and the high base, the e-commerce revenue of the company in 19Q1 decreased by 0.

26%.

2. Sub-brands: 1) PB men’s clothing was affected by a high base, and income in 19Q1 decreased by 11.

64% to 5.

800 million; 2) PB women’s income decreased 2.

96% to 5.

79 trillion; 3) Rakucho affiliate transfer to franchise adjustment ended and growth resumed, Q1 revenue increased by 12.

07% to 2.

14ppm; 4) Mini Peace Q1 revenue decreased by 3.

32% to 2.

0.9 billion; 5) Revenue of new brands MG, Beitian Children’s Wear and Bird’s Nest Household increased 19Q1.

54% to 60.77 million yuan.

Commodity management reform has significantly improved the gross profit margin due to the improvement of the retail discount rate; but the decrease in expenses and income has led to an improvement in the expense ratio; due to the combined impact of reduced asset disposal income and increased government subsidies, net profit decreased by 19Q1 and decreased by 34.

90%.
1) The gross profit margin of apparel operation business increased and increased in 19Q2.
27 points to 57.

59%.

In terms of different channels, the direct, franchise, and e-commerce changes were -0.

29% / 3.

60% 5.

90%.

In terms of brands, PB men’s clothing / PB women’s clothing / Rakucho / Mini have a change range of -3.

06% / 5.

6% / 5.

37% / 6.

58%.

2) The period expense ratio is increased by 4.

94 points to 49.

53%, of which the management expense ratio (including research and development) increased by 0.

64pct to 8.

31%; sales expense ratio increased by 4.

28 points to 40.

89%; financial expense ratio increased by 0.

02pct to 0.

33%.

3) Other influencing factors include: a decrease in income from asset disposal of 3074 million, a gain from disposal of Yichang manufacturing assets of 30.69 million yuan in the first quarter of 2018, and no income for the same period of the year; an increase in government subsidies (an increase of 34.05 million yuan), and a net profit margin in the 19th quarterDrop 2.
43 points to 5.

07%.

The scale of inventory and accounts receivable was properly controlled, but due to the increase in taxes and fees paid and staff budgets, cash in operating activities was a net replacement.

1) The TOC model has gradually become more effective in controlling inventory size. At the same time, the company has more seriously considered the management of out-of-season products and focused on developing outlets and other channels to handle out-of-season products. In the case of reduced revenue, the inventory scale is properly controlled.

The maximum inventory at the end of 19Q1 increased by 1% to 15.

8.9 billion yuan, but a decrease of 2 from the end of 18 years.

4.7 billion yuan.

2) The scale of accounts receivable at the end of 19Q1 increased by 2.

2% to 4.

1.8 billion, but a decrease from the end of 18 years.

7.2 billion.

3) Affected by the increase in taxes and fees and staff budget, the amount of decrease in net cash flow from operating activities.

5.8 billion to -2.

7.1 billion yuan.

Profit forecast and investment rating.

In the short term, the company’s product design innovation continued to improve. The application of the TOC system helped improve the efficiency of the supply chain and enhanced the refined management capabilities of terminal channels. However, due to weak demand and high base factors, 19Q1 performance exceeded expectations.

Taking into account that the base number will be reduced in the later period and the company’s refined operation capabilities will be expanded, it is expected that the later performance will resume its growth trend.

The EPS is expected to be 1 in 19-21.
38, 1.
63 yuan and 1.

97 yuan.

The current market value is 9.1 billion, corresponding to 19PE14X / 20PE12X. It is estimated that it is not high. It can be deployed on a dip after the subsequent performance stabilizes, and maintain the level of “Prudent Recommendation-A”.

Risk reminders: the risk of lifting the ban by Xiaofei; continued sluggish retail environment; intensified competition in casual wear; lower-than-expected marginal profit of newly opened direct-operated stores.

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