\u3000\u3 China Vanke Co.Ltd(000002) 563 Zhejiang Semir Garment Co.Ltd(002563) )
Events
The net profit attributable to the parent company decreased by 4.509 billion yuan and 2.909 billion yuan year-on-year, with a year-on-year decrease of 4.909 billion yuan, and the net profit attributable to the parent company decreased by 4.909 billion yuan and 2.902% year-on-year. Lower than previously expected.
Performance review
Children's wear business increased slightly year-on-year, and offline terminals were under pressure. Sub business: 1q22 is expected to achieve a slight increase in the company's children's wear business, which is still resilient against the trend; Number of units in the year-on-year decline of adult clothing revenue. By channel, Tiktok continues to be made online, and it is expected to achieve high double-digit growth; Offline stores are affected by the epidemic, and the revenue of direct / franchise channels is expected to decline significantly. In terms of store expansion, the number of adult clothing stores is expected to increase by single digits, and the number of children's clothing stores is expected to decline slightly.
Both gross profit margin and net profit margin fell year-on-year. 1q22's gross profit margin is 42.65% (-1.32 PCT), which is mainly due to the increase of upstream procurement costs and the reduction of profit space caused by the combined effect of retail discount and promotion. During the period, the sales / management expense ratio was 24.10% (+ 4.7 PCT) / 5.85% (+ 0.6 PCT) respectively. The increase of platform traffic cost led to a large increase in the sales expense ratio. The net interest rate is 6.06% (- 4.6 PCT), of which 146 million yuan is generated from asset impairment, mainly due to the provision of old inventory.
Inventory turnover slowed down and cash flow decreased significantly. By 1q22, the inventory level of the company had reached 4.052 billion yuan (+ 66.0%), basically the same as that at the end of 21; Inventory turnover days reached 191 days, a year-on-year + 72 days. Under the influence of the epidemic and weather, the retail end continued to be under pressure, resulting in inventory backlog and slow turnover. In terms of cash flow, the net cash flow from operating activities of the company was - 06 million yuan, a year-on-year decrease of 101%.
Investment suggestions and risk tips
Investment suggestions: the company continues to strengthen brand and product construction, vigorously develop new retail business, counter the risk of decline in offline passenger flow, and constantly optimize its own operation efficiency; With the gradual improvement of the epidemic situation, the performance is expected to recover rapidly. It is estimated that the net profit attributable to the parent company in 22-24 years will be RMB 1.510/1.781/2.081 billion, corresponding to 12 / 10 / 8 times of PE, maintaining the "buy" rating.
Risk tip: the spread of the epidemic affects store sales in other regions, and the upgrade of adult clothing brand is not as expected
