Shanghai Jahwa (600315) 2019 First Quarterly Report Review: Channel Inventory Cleanup Resulting in Accelerating Revenue Growth and Light Loading and Performance Continued to Improve
1Q1 revenue increased by 5.
03%, destocking and implementing improvement targets, non-recurring gains and losses promoted a substantial increase in net profit54.
84% of the companies achieved operating income in the first quarter of 201919.
5.4 billion, with an annual increase of 5.
03%; deduct non-attributed net profit 1.
61 ppm, an increase of 6 in ten years.
69%; net profit attributable to mother 2.
33 ppm, an increase of 54 in ten years.
84%; EPS 0.
35 yuan, of which the growth rate of net profit attributable to mothers is higher than the deduction of non-attribution to mothers. The growth rate is mainly in accordance with the new financial instrument accounting standards.
Looking at the quarter, the company’s 18Q1?
19Q1 revenue growth was 10.
03%, 19Q1 revenue growth rate is mainly 19Q1 Herborist, Gough mainly destocking, revenue performance offset, net profit growth rate was 35.
The performance evaluation target of the company’s equity incentive in 2019 is based on 2017, and the growth rate of revenue and net profit is not less than 54% and 92% respectively. It is calculated that the company will achieve the 19-year performance target.
4 Gradually increase revenue and net profit The growth rate for the same period of 18 years in ten years should be no less than 52.
In the distribution channels of department stores, e-commerce and other distribution channels, Herborist, Gough mainly focuses on destocking, and the channel / brand performance is differentiated. From the perspective of channels, KA (commercial supermarket), CS (cosmetic specialty stores) and other channels have achieved double-digit average revenue growth;The e-commerce channel is mainly based on destocking, and its revenue decreases each year and slightly increases. Among them, the GMV of e-commerce has increased by about 25%.
In terms of brands, Liushen’s revenue increased by double digits; Herborist mainly focused on destocking and its revenue declined. In the future, it will strengthen word of mouth marketing, online and offline drainage, and focus on star products, so as to accelerate the performance of revenue; Gao FuAffected by destocking, single-digit revenue growth; the initial increase exceeded about 20%, of which online rapid growth, slightly higher than offline, 3.
On the 23rd, the brand released a new series of new perception products. It is expected that the revenue in 19Q2 will exceed 19Q1; the revenue of Yuze, Jia’an, and Pianzaiyu will exceed 50% +.
19Q1 gross profit margin fell, expense ratio fell, inventory turnover accelerated gross profit margin: 19Q1 gross profit margin fell 4.
55PCT to 62.
17%, mainly due to the new plant put into operation, related cost increases and high gross profit margin of Herborist sales were even worse.
By quarter, 18Q1?
19Q1 gross profit margins were 66.
Expense rate: Each decrease in expense rate during the period 3.
24PCT to 55.
Among them, sales, management + research and development, and financial expense ratios are 42.
35PCT), among which the decrease in sales expense ratio is mainly due to the fact that some marketing activities have not yet started, and the expenditure is gradually scheduled to be flat for a long time. The decrease in management expense ratio is mainly due to the company’s strengthening of cost control.
By quarter, 18Q1?
19Q1 sales expense ratio was 43.
65PCT), showing a continuous downward trend, mainly due to the company’s strengthening of cost control; management expense ratios were 13 respectively.
25PCT), since 18Q4, the management expense ratio has continued to decline, mainly due to the company’s strengthening of cost management and control. The annual management expense ratio target for 19 years is 11%, and the future target continues to drop to 10%; the financial expense ratio is 1.
Other financial indicators: 1) The total inventory at the end of March 19 was 9.
1.7 billion, an increase of 4 earlier.
81%, the inventory / revenue ratio is 46.
93%, 46 of the earlier 18Q1.
68% increased slightly, inventory turnover investment was 0.
83, 0 of the earlier 18Q1.
76 has improved.
2) Accounts receivable increased by 6.
51% to 10.成都桑拿网
9.7 billion, accounts receivable turnover investment1.
84, 1 of the earlier 18Q1.
3) Asset impairment losses are downgraded by 96 each year.
19% to 360,000 yuan, mainly because in 19Q1, the provision for bad debts of accounts receivable and other receivables was included in “credit impairment losses” and the provision for inventory depreciation was at least reduced.
4) Investment income increases by 22 every year.
61% to 53.77 million yuan.
5) Net cash flow from operating activities has been downgraded for ten years.
67% to 2.
6) Non-recurring gains and losses increased by 443 in ten years.
86% to 72.73 million yuan, of which, in addition to the effective hedging business related to the company’s normal business operations, investment income obtained from holding transactional financial assets increased by 70.55 million yuan, and these financial assets were contributed by the company in 20165One billion yuan investment in the corresponding share of the consumption fund affiliated to Ping An Group.
Following brand reorganization and channel adjustment, Herborist inventory was cleared again. In 19 years, key development strategies continued to promote 19Q1 companies to focus on department stores, Vipshop and other distribution channels. Herborist, Gough inventory, mainly for Herborist to reorganize the brand image at the end of 2018.Focusing on the development of resources, the company accelerated the cleanup of categories that are inconsistent with the new product image in 19Q1. At present, the social inventory of Herborist has decreased by about one month, and the social inventory level has improved. It is expected that it will continue to decrease in the future.
Herborist is the company’s largest brand in the cosmetics category, with a revenue share of about 30%, and a high level of gross profit margin, and its income performance affects the company’s gross profit margin.
The main sales channels of Herborist include department stores, e-commerce, etc. In recent years, due to the company’s internal management changes, the brand has developed slowly for many years, and it can grasp the rapid development bonus of the industry.
In 2018, Herborist reorganized its market share in the skin care industry in developing countries1.
7%, a decrease of 2PCT from the previous year, ranking 12th, and ranking 7th among local brands, respectively, one drop and one drop from the previous year.
In 2019, the company will focus on the development of Herborist. It will make full efforts in brand, channel, marketing and products: 1) Brand: At the end of 2018, Herborist will complete the reorganization of the brand and issue a new brand slogan “The Beauty of Time” to clarify the tone of the Chinese medicine brand; 2) Channel: At the end of 18, a new Tmall operator was replaced. In 19Q1, the categories that were inconsistent with the brand’s new image were reduced to reduce the level of social inventory. The adjustment effect was good. Since February, the growth of the Herborist Tmall flagship store has resumed positive growth.It has continued to this day; 19Q1 company’s inventory level has dropped, and the turnover has accelerated for a period of time; 3) Marketing: existing companies have established high-level dialogues with major social media, and will focus on emerging marketing methods such as content marketing in the future; 4) products: concentrated in 19 yearsCreate lyophilized facial masks, sun and moon essence and other star explosion models, and create a two-way positive circulation system of products and brand reputation.
Channel inventory clearance affects short-term performance. It is light-loaded, and “marketing + products” are working. Performance is expected to improve. We believe that: 1) the income side, 19Q1 inventory clearance affects short-term performance, but it is beneficial to the overall improvement of the company’s operating quality in the long run.Among them, Herborist continues to adjust, enter lightly, expect to improve performance, and other brands are expected to continue to maintain good growth; 2) In terms of gross profit margin, it is expected that the impact of depreciation stalls in new factories will continue, and the decline in gross profit margin will decrease; the company will strengthen its control over expense ratio.Future decline; 3) Company 4.
26 Announcement Because the Qingpu District Government collected the company’s industrial land, the two parties negotiated the proposed “Conventional Land Non-residential House Compensation Agreement”, and the company will receive a total of 1 relocation compensation.
US $ 9.4 billion, the company will be included in the current profit and loss based on the availability of government compensation (expected in 19Q3).
We are optimistic about the company’s multi-brand high-quality assets. Following the brand repositioning of Herborist brand and optimization of channel inventory, channel inventory problems have been optimized and loaded lightly. In May, we will increase content marketing efforts, focus on resources to create freeze-dried masks, sun and moon essence, etcStar products, Nuggets cosmetics industry dividends, the adjustment effect is gradually improved, and performance is expected to usher in improvement, maintaining 19?
The 21-year EPS is 0.
26 yuan, corresponding to 31 times the 19-year PE, raised to “Buy” rating.
Risk warning: Weak terminal retail; Herborist brand adjustment effect is less than expected; Multi-brand cultivation is less than expected.