\u3000\u3000 Zhejiang Semir Garment Co.Ltd(002563) (002563)
Senma, a brand of adult casual wear, and barabara, a brand of children's wear, are among the two leading market segments in China. The company's main businesses are adult casual clothing + children's clothing. According to Euromonitor, in 2021, the market scale of children's clothing and adult casual clothing in China was 256.4 billion yuan and 1.71 trillion yuan respectively, and CR10 was 15.3% and 10.7% respectively. Among them, the sales market share of barabara and Senma brands were 7.1% and 0.8% respectively, ranking first in children's clothing and fourth in casual clothing.
The performance is now recovering, but the recovery momentum slows down under the repeated epidemic. 1) Overall, the company was greatly affected by the epidemic in 2020, and its performance showed recovery in 2021, but it has not yet recovered to the pre epidemic level. In 2021, q1-q3 revenue was 10.021 billion yuan / yoy + 6.04% / 24.43% compared with the same period in 2019, and the net profit attributable to the parent was 943 million yuan / yoy + 336.64% / 27.88% compared with the same period in 2019. 2) On a quarterly basis, the epidemic situation in Central China in 2021 had a secondary impact on consumption, and the recovery slowed down quarter by quarter. Compared with the same period in 2019, the revenue of 2021q1 / Q2 / Q3 was - 19.6% / - 21.8% / - 30.5% respectively, and the net profit attributable to the parent company was + 1.6% / - 16.7% / - 52.6% respectively. 3) Excluding the impact of kidiliz, the company's original business income performance is better than the report side data. The company acquired the French children's clothing brand kidiliz in 2018 and spun it off in September 2020. Under comparable standards, q1-q3 revenue of the company's original business in 2021 was + 20% / 10% compared with the same period in 2019, and net profit attributable to parent company was + 32% / 35% compared with the same period in 2019.
Children's wear and online performance is good. 1) By business, children's wear business is relatively resilient, and casual wear is more affected by the epidemic. The proportion of children's wear / casual wear revenue in 2021h1 was 63% / 36% respectively, with a year-on-year increase of + 32.14% / + 28.73% respectively, and + 10% / - 20.23% respectively compared with 2019h1 (all comparable caliber, i.e. excluding the influence of kidiliz). Considering that the epidemic situation is still repeated in the third and fourth quarters, we judge that this trend will continue in 2021: the annual children's clothing business is expected to return to the pre epidemic level, and there may still be a gap between the casual clothing business and the pre epidemic level. 2) By channel, after the epidemic, the number of offline stores contracted and the proportion of online revenue increased, which were 28% / 38% / 41% in 2019 / 2020 / 2021h1 respectively. The epidemic has a more direct impact on offline consumption. The number of offline stores (excluding kidiliz) in 2019 / 2020 / 2021h1 is 9556 / 8725 / 8733 respectively. The number of stores in 2021h1 is 8.6% lower than that in 2019 (including franchise / direct sales - 10.9% / - 7.9% respectively). The revenue under 2021h1 under comparable standards is 36.3% higher than that in 2019h1 / 18.0% lower than that in 2019h1; Online revenue continued to expand, with a year-on-year increase of 28.4% in 2021h1 / 29.1% compared with 2019h1.
Profit forecast and investment rating: 1) in the long run, with reference to 2021, the CR10 of children's clothing market in the United States, Japan and South Korea are 43.5%, 43.5% and 31.2% respectively, and that of adult clothing is 19.5%, 38.1% and 20.7% respectively. In the future, the market concentration of children's clothing / adult clothing in China is expected to continue to improve, and barabarabara and Senma brands are expected to rely on their role in the supply chain Channel and other competitive advantages continue to expand market share. 2) In the short term, although the recovery of casual wear business is slow, the channel adjustment and discount strategy have effectively improved its gross profit margin level, and the resilience of superimposed children's wear business is prominent. We believe that the company's performance has greater resilience after the impact of the epidemic is weakened. We expect that from 2021 to 2023, the company's revenue will increase by 2.6% / 16.6% / 13.9% year-on-year, and the net profit attributable to the parent company will increase by 89.2% / 18.2% / 14.8% year-on-year. The corresponding PE will be 13.7x / 11.6x / 10.1x respectively, and the "buy" rating will be given for the first time.
Risk tip: the epidemic has repeatedly affected residents' consumption and increased inventory pressure.
