\u3000\u3 China Vanke Co.Ltd(000002) 563 Zhejiang Semir Garment Co.Ltd(002563) )
Core view
Zhejiang Semir Garment Co.Ltd(002563) released the 2021 annual report. The company achieved an operating revenue of 15.42 billion, a year-on-year increase of 1.4%, and a net profit attributable to the parent company of 1.49 billion, a year-on-year increase of 84.5%. The annual report of the company plans to pay 5 yuan out of 10, which corresponds to a dividend rate of more than 7% of the current share price.
The performance of children's clothing is still significantly better than that of adult clothing, and the online channel is growing relatively rapidly. 1) From the perspective of sub brands: in 2021, adult clothing and children's clothing increased by 1.4% and 1.4% respectively year-on-year. After deducting the factor of kidliz company, the children's clothing business in China increased by about 15% year-on-year, and the performance of children's clothing is still relatively bright. From the perspective of store opening, 268 stores for adult clothing will be closed to 2823 stores, and 110 stores for children's clothing will be increased to 5744 stores. It is expected that both brands are expected to open stores in 2022. 2) By channel, excluding the impact of kidiliz, online / direct / franchise / joint venture business increased by 13% / - 3% / 8% / 42% year-on-year in 2021, of which 21h2 increased by 4% / - 19% / - 1% / - 32% year-on-year respectively. From the perspective of e-commerce channels, the total assets and members of Senma brand group are in the leading position in the industry; The head effect of barabarabara brand has been further expanded, and the core indicators such as sold out rate and inventory turnover rate have been continuously improved; While achieving performance growth, e-commerce brand minibalabala has achieved new positioning and upgrading of products and completed the transformation of new brand image.
21q4 is affected by the external environment such as warm winter + epidemic, and the terminal retail is under pressure. The operating revenue and net profit of 21q4 were 5.4 billion and 540 million respectively, down 6.2% and 7.8% year-on-year, of which the gross profit margin increased by 3.7pcts to 41.5% year-on-year, indicating better discount control. By the end of 2021, the inventory was 4.02 billion, which was basically the same as that of 21q3. The side shows that the sales of winter clothes are under pressure. However, after entering 2022, the retail performance of the company has recovered. From the 15 days before and after new year's Eve in 2022, the company has achieved high double-digit growth in all channels, and we expect the inventory situation to improve at the beginning of the year.
Looking forward to 2022, considering the impact of the recent epidemic, the company's terminal retail is still under pressure, but on the other hand, the company's leading advantage in children's wear in China is still obvious, the market share in China is far ahead, and the marginal improvement will continue after the adjustment of adult wear business. We believe that after the normalization of the epidemic in the future, the company's operational efficiency and profitability can be improved.
Profit forecast and investment suggestions
According to the annual report, we lowered the profit forecast for 20222023 and predicted that the earnings per share for 20222024 would be 0.62, 0.73 and 0.86 yuan respectively (compared with 0.67 and 0.78 yuan in 20222023). Referring to comparable companies, we gave the company a PE valuation of 14 times in 2022, corresponding to the target price of 8.65 yuan, maintaining the "buy" rating of the company.
Risk tip: the impact of repeated epidemic and sustained economic slowdown on clothing terminal retail, the risk of traffic differentiation of e-commerce platforms, etc
