Baoxiniao Holding Co.Ltd(002154) (002154)
With lfcorp Renew hazys brand license and increase luggage category authorization
The company and its wholly-owned subsidiaries, Shanghai demirui and South Korea lfcorp Renew the brand licensing contract, Licensing companies and di EMI produce and sell HAZZYS brand clothing and accessories products in Chinese mainland, and increase the authorized category of bags.
Previously, the company and South Korea lgcorp (renamed lfcorp.) the 10-year brand license is about to expire, and this renewal will take effect on January 1, 2022. The men’s and women’s wear are valid for 10 years, of which the first period is 5 years. When the number of outlets and sales amount meet the standards agreed by the three parties, the contract will be renewed for 5 years; the luggage is valid for 3 years, and the contract will be renewed when the number of outlets and sales amount meet the standards agreed by the three parties. LF A certain proportion of brand royalties shall be charged for performance, and the minimum guaranteed license royalties shall be agreed. With the written approval of LF, demerit can independently select suppliers for product production.
Hazys focuses on channel optimization + product R & D + brand promotion. It is a leader in the field of medium and high-end British leisure
The company has continuously operated the hazys brand for many years. At present, the hazys brand has high popularity, reputation and loyalty in China, and is in a leading position in the medium and high-end British leisure style segment market. As of September 30, 2021, the company has established 391 offline stores in core business districts, shopping malls and shopping centers in core cities across the country, and established brand official flagship stores on third-party platforms such as tmall and JD. In recent three years, hazys brand has achieved operating revenue of 870 million yuan, 1.01 billion yuan and 1.23 billion yuan respectively, with an annual compound growth rate of 18.92%.
By signing the brand license contract, further strengthen the cooperation between the company and LF, and lay a foundation for the company to achieve high-quality, stable and sustainable development. In the future, the company will continue to strengthen hazys brand channel optimization, product R & D, brand promotion and operation management, continue to make use of the advantages of platform + brand “1 + n” to strengthen hazys brand expansion, increase the expansion of franchisees in third and fourth tier cities and improve the overall store scale based on the first and second tier advantageous markets; Promote the development of young products, multi category and multi series; Adhere to brand building and promotion matching with brand positioning, improve customers’ comprehensive experience, reputation and repurchase rate, and promote the company to achieve high-quality, stable and sustainable development.
Maintain profit forecast and buy rating. After the renewal, Haggis brand will expand its stores in Chinese mainland, expand the market, increase the scale of the shop, and continue to promote the brand development. Other mature brands, growing brands and cultivating brands will also clarify their development direction and improve operation efficiency. We estimate that the company’s revenue from 2021 to 2023 will be 4.58 billion yuan, 5.61 billion yuan and 6.89 billion yuan respectively, the net profit attributable to the parent company will be 510 million yuan, 660 million yuan and 870 million yuan respectively, the corresponding EPS will be 0.4, 0.5 and 0.7 yuan respectively, and the PE will be 12, 9 and 7x respectively.
Risk tip: macroeconomic growth and social consumption prosperity are lower than expected; Brand channel expansion and terminal sales are less than expected; Intensified industry competition, etc.
