Semir Apparel: The Fundamentals Are In The Lead. Follow Up Foreign Investment Acquisition Is Expected To Raise The Price Elasticity.

At present, the valuation is 22.5 times in 15 years. On the basis of basic support this year, the company's continued investment in mergers and acquisitions and resource integration in the fields of children's animation, film and television, games, education and so on still expect to give some flexibility to the valuation.

Since the beginning of the year, we have explicitly listed the company as the subject matter recommended for 15 years, and maintained the rating as "strongly recommended -A". The fundamentals have given the current valuation margin of safety. Due to the recent rise in share prices, the follow-up elasticity mainly depends on the extension of the children's industrial chain and the high-end.

And the acquisition of electricity providers and other areas to promote the expected grasp.

If the subsequent acquisition is successful, the target valuation can be improved accordingly.

Under the weak market environment, performance is ahead, and growth is in line with expectations.

In the 14 year, the company achieved operating income of 8 billion 147 million yuan, an increase of 11.47% over the same period last year, and operating profit and net profit attributable to parent companies were 14.74 yuan and 10.92 yuan, respectively, up 19.26% and 21.09% respectively, and the basic earnings per share were 1.63 yuan, basically in line with expectations.

The profit distribution plan distributes 10 yuan (including tax) to every 10 shares, and pfers 10 shares to every shareholder in every 10 shares with the capital reserve fund.

According to quarterly calculation, Q4 revenue increased by 17.70% compared with the previous three quarter, while the growth rate was higher than the previous three quarters. Operating profit and net profit attributable to parent company increased by 15.04% and 20.18% respectively.

The business of casual wear has gone out of a stable growth, children's clothing business and

Maintain rapid growth.

The company's casual wear business has taken the lead in the industry in 13 years. With the resolution of the negative inventory problems and the adjustment of the order form, Semir brand has been able to go on the market in 14 years, and its revenue growth has been negative since Q2.

At the same time, the brand channel is also continuing to adjust, the closure of low operational efficiency stores (the number of stores decreased by 487 last year to 3542), and the optimization of terminals made Semir brand realize annual revenue of 4 billion 903 million yuan, an increase of 4.69% over the same period last year.

Children's clothing business is still the biggest highlight of the company's development.

In the end of 14, the number of baraman stores reached 3540, increased by 67, and the area increased by about 25%. The revenue reached 3 billion 167 million yuan last year, up 24.91% over the same period last year.

Under the low base of electricity business, Semir and Bala brands achieved 500 million sales respectively and made some profits, basically completed the annual sales of electricity suppliers 1 billion yuan, an increase of 100% over the same period.

With the increase of base and the reduction of government subsidies, the stability of gross margins and the strict control of fees have kept the growth rate above 20% in the first three quarters.

Last year, the company got more government subsidies, which led to the improvement of the base. But under this background, the gross margin increased (14 years +0.71PCT) and the cost rate decreased (14 years -0.36PCT, including sales cost -1.35PCT, management fees and financial expenses respectively +0.25 and +0.74PCT), so that the annual net profit growth rate remained above 20%.

The increase in the amount of affiliate credit leads to the increase of accounts receivable. The increase of equipment and cargo in spring and summer has led to a slight increase in the stock of reports, which has resulted in a decrease in cash flow compared with the same period last year.

Accounts receivable, at the end of 14, was 1 billion 77 million yuan, representing an increase of 461 million yuan and 240 million yuan respectively compared with the same period last year and the end of the term.

In terms of inventory, taking into account Semir's spring and summer orders will increase by 10% and 15% respectively, the two orders for children's clothing and spring and summer will increase by 30% and 20% respectively. The increase in the stocking size of goods in spring and summer will lead to an increase in the number of goods in storage, and the inventory will reach 1 billion 34 million yuan at the end of the year, a slight increase of 112 million yuan over the same period last year.

In terms of cash flow, the net operating cash flow at the end of the year was reduced to 762 million yuan, which was 45.28% lower than that of the same period last year due to the large amount of cash that should be collected and the increase in the size of stocking, the large amount of cash, and the increase in purchases of goods, the increase of personnel salaries and the reduction of government subsidies.

15 years

The steady growth trend and the continuous efforts of children's clothing will effectively guarantee the company's annual performance in the industry to maintain relatively fast growth.

For leisure wear business, this year, the company will promote the standardized planning and settlement strategy of stores, and further enhance the market share of Semir brand by opening new stores and increasing the area (+10%).

Among them, the first half of the 15 spring and summer orders will achieve 14% and 20% growth respectively under the guidance of the expected leisure wear business is expected to continue to stabilize growth trend.

The children's clothing business will continue to focus on the strategy of brand extension + category extension, hoping to consolidate Barra's leading position in the field of children's clothing (the main line of shopping center is expected to grow by more than 20%). At the same time, the new brand dream and mini Barra will achieve two-way extension in the target market positioning and products, and will form a high-end brand gradient layout with the agent's high-end Italy brand Sarabanda, so as to further improve the market share and create an influential professional children's clothing and supplies leading brand. In addition, using the Internet thinking, according to the characteristics of Barbara brand and two new brands, online and offline implementation of the "differentiation" and "the same price with the same price" electricity supplier development strategy.

Judging from the current development of children's wear business, in view of the 15 spring and summer Barbara orders will increase by 30% and 20% respectively, plus the dream of many new stores, and Mini Bara's two new brands to continue, it is expected that children's clothing business will still be the highlight of the company's development this year, and can maintain relatively fast growth trend.

To sum up, it is expected that the company's revenue growth in 15 years will be slightly better than 14 years or two digit growth, and the profit growth rate is expected to reach more than 20%.

The subsequent continued acquisition of foreign investment is still one of the main drivers of the stock price this year.

This year, the company's investment abroad has changed.

In addition to the related acquisitions in the extension of the children's industrial chain, it will invest in the larger high-end brand or brand of e-commerce, hoping to increase the EPS value of the company by investing in the high quality standard and enhance the collaborative value.

First, on the extension of children's industrial chain, the company plans to build a children's Internet platform and expand products and industries on the basis of balbala's nationwide scale leading edge.

This year there are still expectations for children's education, animation, film and television, Internet and other fields.

In addition, this year, the company also hopes to acquire large scale high-end brand and e-commerce brand, so as to enhance the synergy value between businesses.

Overall, the expectation of continuing foreign investment this year will remain one of the main drivers of this year's stock price elasticity.

Of course, the company lacks experience in the field of extension, and how to continue to observe in the new field.

Earnings forecasts and investment recommendations: the company cleared inventory and closed inefficient stores in 12 years, laying the foundation for subsequent stable development.

Overall, the company has basically come to a low level in the second half of 13 years. In the case of market terminal demand, there is no obvious sign of recovery. The growth rate of the company's revenue in 14 years has changed from negative to positive. In the 15 spring and summer, the growth rate has been increased by 14% and 20%, and the growth rate has been slightly higher than that in the 14 spring. It is expected that with the continuous improvement of the reform measures, the company's leisure wear business is expected to resume a certain growth in 15 years, and the children's clothing business is still the biggest bright spot in recent years. Considering that the industry is relatively young, the future development space is still better than that of casual wear.

EPS is estimated to be 1.95, 2.24 and 2.55 yuan in 15-17 years, corresponding to 22.5 PE in 15 years.

This year, the company's long-term strategy will be based on consolidating the market position of the two core brands.

"To" integrated service providers for children's industries ".

Considering that the development of children's industry in China is very weak, there are great opportunities for children's clothing, animation, film and television, education and other fields. The acquisition of early education institutions, though the scale is small, indicates that the road of the company's industrial chain extension has been opened, and the company's subsequent investment in mergers and acquisitions and resource integration in children's animation, film and television, games, education and other fields is still expected to give some valuation flexibility.

Since the beginning of the year, we have explicitly listed the company as the subject matter recommended for 15 years, and maintained the rating as "strongly recommended -A". Due to the recent rise in share prices, the fundamentals have given the current valuation margin of safety, while the follow-up elasticity is mainly based on the expectation of the acquisition of children's industrial chain, the purchase of medium and high-end adult brand products and electricity providers.

The target price is 15 years and 25 times PE as the center, corresponding to the target price center is 48.75 yuan. If the subsequent acquisition is successful, the target valuation can be promoted.