Semir Clothing (002563): Children’s clothing was a significant reform of casual wear at the time

Semir Clothing (002563): Children’s clothing was a significant reform of casual wear at the time

Children’s Wear + Casual Wear Double Leading Company.

Based on the main business of casual wear, Semir Garment will expand its business to children’s wear and e-commerce business.

Each of them owns two core brands of casual wear “Senma” and children’s wear “Bara Balla” (H1 revenue accounted for 47% / 52% in 2018).

The business model is mainly franchising, with online and offline omni-channel layouts. There are 766/8098 direct-operated / affiliated stores offline, and the 2018H1 revenue accounted for 16% / 55% / 29%.

The children’s wear business continued to grow rapidly, and the current results of the casual wear business after the reform began to show up. In 2018, the company’s operating income / net profit attributable to mothers were 157.

2/16.

90,000 yuan, an increase of 30 in ten years.

7% / 48.

7%.

Children’s clothing business: As one of the early enterprises involved in the field of children’s clothing, the core advantages of Semir’s children’s clothing business are: 1) the product side, continuous research and development to ensure product innovation, the company’s research and development continues to increase, and the research and development expense rate remains between 2% and 3%; 2) The supply chain side.

Strengthen cooperation with large-scale high-quality suppliers (Shenzhou, Esquel, etc.) to ensure product quality; 3) On the channel side, the Barbara brand became a first-mover advantage, settled in most shopping malls, formed online and full-channel operations, and the number of terminal outlets has been completedDeveloped to 4,981 (about 1,500 shopping mall stores) 4) The brand side, acquired TCP to become an operating right in China (including Hong Kong, Macao and Taiwan), acquired Kidiliz Group to improve the brand matrix and open up market space.

We expect the children’s clothing business to achieve operating income of 80 in 2018-2020.

4/94.

4/110.

700 million yuan, with an annual growth rate of 27% / 17% / 17%.

Casual wear business: Optimizing suppliers and building a fast-reverse supply chain, realizing 4 schedules with a long period and 8 schedules with a short period, from a futures to a futures + spot system, with a spot share of 20% +; adjustmentChannel structure, forming an all-channel development pattern of specialty stores, department stores, shopping malls, outlets and e-commerce. The number of stores in 2018H1 was 3,883 (about 500 stores in shopping malls).

We expect that the same-store growth of the Semir brand in 2018 will reach a high number, and casual wear will achieve revenue of 67 in 2018-2020.

3/73.

4/79.

800 million, an increase of 19% / 9% / 8%.

E-commerce business: Against the background of slowing traffic dividends, Semir can replace its brand advantages and gain traffic support to maintain rapid growth.

Currently, e-commerce business revenue accounts for 30%. We expect the company’s e-commerce business revenue to grow at about 30% in 2018, reaching 40 billion +.

The e-commerce platform has switched from the function of inventory cleaning to offline inventory cleaning + online dedicated supply (50%) model, transforming supporting e-commerce industrial parks, and logistics projects to promote online and online business integration.

Profit forecast and investment advice: As a leading company in casual wear and children’s wear, Semir’s apparel and children’s wear business continues to advance internationally, its category matrix has been improved, and Barbara’s leading brands have maintained rapid growth.

Casual wear business experienced products, and supply chain upgrades resumed growth.

It is expected that the company will achieve a net profit of 16-2018.

9/19.

5/22.

500 million, corresponding to 16 times the 19-year PE.

Covered for the first time, giving “overweight” rating.

Risk reminders: The terminal retail business climate reduces risks; the implementation of the children’s wear TCP brand is less than expected risks; the channel expansion is slower than expected risks; and the risk 西安耍耍网 of unsuccessful overseas business development.