Hailan House (600398) Tracking Analysis: Single-Quarter Revenue Growth in the Third Quarter Exceeds Expected Gross Margin Changes Affects Net Profit

Hailan House (600398) Tracking Analysis: Single-Quarter Revenue Growth in the Third Quarter Exceeds Expected Gross Margin Changes Affects Net Profit

Core point of view: The main brand’s single-quarter revenue growth in the third quarter exceeded expectations.

The company’s operating income for the first three quarters of 2019 was 146.

89 ppm, an increase of 12 in ten years.

63%, net profit attributable to mother 26.

16 ppm, a decrease of 0 per year.

45%, including single-quarter operating income of 39 in the third quarter.

68 ppm, an increase of 31% in ten years, and net profit attributable to mothers4.

91 trillion, down 12 a year.

64%.

In terms of brands, Hailan House, Aiju Rabbit, San Keno, and other brands (Hailan Optimized, OVV, AEX, boys and girls, Ying’s) increased by 14 in the third quarter.

41%, -13.

85%, 77.

44% and 687% (9 in the second quarter respectively.

30%, -23.

57%, 14.

52% and 357%), the acceleration of the growth of the main brand benefits from the appropriate reduction of the magnification, which has a better promotion effect on sales, improved channel structure, increased growth of malls and malls in the same store, and faster growth of e-commerce business.

The decrease in net profit attributable to mothers in the third quarter was mainly due to the decrease in gross profit margin.

The company’s gross profit margin in the third quarter was 42.

01%, compared with 52 in the same period last year.

79%.

The decrease in gross profit margin was mainly due to the single quarter gross profit margin of the Hailan House brand in the third quarter of 38.

95%, compared with 54 in the same period last year.

54%, in addition to a high buyout ratio in the same period last year, it is also related to the main brand ‘s appropriate reduction of the magnification this year to promote sales, the proportion of buyout products has dropped, and Haiyi ‘s inventory clearance (including the main brand) has been changed.At the end, the gross profit margin is expected to rebound.

Operational indicators and operation quality have been continuously improved.

The company’s inventory turnover days and accounts receivable turnover days in the first three quarters were 299 days and 14 days (333 days and 16 days in the same period last year).

Net operating cash flow for the first three quarters was 2.

10,000 yuan, an increase of 47 per year.

79%.

EPS for 2019-2021 are expected to be 0.

78 yuan / share, 0.

90 yuan / share, 1.

01 yuan / share.

We are optimistic that the company’s net profit attributable to the mother in the fourth quarter is expected to increase. The Spring Festival in 2020 will help sales in the fourth quarter of this year, and at the same time, 武汉夜生活网 the gross profit margin will be reduced.

With reference to the average PE of a comparable company in 2019, the company is given December 2019.

5 times PE, reasonable value 9.

75 yuan / share, maintain “Buy” rating.

Risk reminder: the risk of terminal inventory backlog; the risk of extreme weather affecting clothing sales, etc.