Hailan House (600398): The growth rate of Q2’s main brand has obviously increased, and the inventory scale has effectively decreased.

Hailan House (600398): The growth rate of Q2’s main brand has obviously increased, and the inventory scale has effectively decreased.

Hailan House (600398): The growth rate of Q2’s main brand has obviously increased, and the inventory scale has effectively decreased.

Investment Highlights Event: The company announced its 19-year interim report, with 19H1 revenue increasing by 7 as well.

1% to 107.

2.1 billion, net profit attributable to mother increased by 2.

9% to 21.

25 ppm; specific to 19Q2, revenue increased by 9 as well.

6% to 46.

200 million, net profit attributable to mother decreased by 2.

1% to 9.

200000000.

Revenue by brand: Hailan House series brands Q2 grew faster, San Keno and other brands grew steadily, and Ijutu is still in the adjustment period.

1) Hailan House series (merged into the sea in 19Q1): Co-branded products such as the troubled Tiangong series were welcomed, Q2 grew significantly faster than Q1, and the single-quarter growth rate reached 9.

3%, but the gross profit margin was slightly 0 compared with the same period last year.

8pp dropped, the number of stores expanded to 5,449; 2) Aiju rabbit brand: still in the adjustment period, the number of stores reached 1,241, but the income Q2 is under pressure, falling 24%, and gross margin is also under pressure.

3) Other brands: 19H1 overall revenue increased by 993% to 3.

0.8 billion, boys and girls, Hailan preferred, OVV performed well; 4) San Keno brand: 19H1 revenue increased by 13% to 9%.

USD 3.6 billion, Q2 grew faster than Q1, and the bilateral integration of the company’s professional wear business competed.

From the perspective of different channels: the growth of beneficiary major brands has accelerated, and the growth performance of online and offline businesses in the second quarter has clearly improved compared to Q1.

1) Offline business: Due to the consolidation of boys and girls and the continuous opening of Hailan House, the number of offline channels of the company reached 7,740, and the expansion of the number of stores led to an increase in offline revenue of 19H1 by 8 as well.

1% to 98.

4 ‰, Q2 growth rate reached 11.

7%, faster than the first quarter.

2) E-commerce business: The scale of 19H1 was the same as that of 18 years, and Q2 smoothly resumed positive growth with a growth rate of 6.

0%.

In terms of financial statements: Hailan’s homeowner brand’s profit growth has been healthy, and British, male and female students have renewed, and convertible debt-related financial costs have resulted in slower profit growth than income.

19H1 income / net profit attributable to mother increased by 7.

1% and 2.

9%, of which the income and profit growth rate of the main brand of Hailan House match, but due to the increase in financial costs caused by the substitution of boys and girls and Yingshi, and convertible bonds, the total impact on profits is about 9,000 million., The company’s revenue and profit growth rates generally match.

The scale of Hailan’s main brand inventory has effectively contracted, and the quarterly settlement effect has caused a change in cash flow in a single quarter: In 19Q2, the company’s inventory increased by zero.

2% to 88.

400 million US dollars, of which the main brand inventory decreased by nearly 1 billion US dollars compared with the same period last year, and the scale fell to 6 billion US dollars, showing an effective improvement in inventory turnover; in terms of cash flow, other payable funds in the collection of franchise stores compared with the beginning of the periodSignificant reductions (related to the settlement cycle) and prepayment income caused Q2’s single-quarter operating cash flow to deviate from the same period last year. This is a 天津夜网 quarterly change and will not have a significant impact when it occurs.

Earnings forecast and investment rating: It is estimated that the company’s net profit attributable to its mother will be 35 in 19/20/21.

8/38.

3/40.

700 million yuan, corresponding to the growth rate of 4% / 7% / 6%, corresponding to PE10.

4X / 9.

7X / 9.

2 times.

In the company’s second-phase repurchase plan scale, it is planned to increase to 6 within 12 months after August 8, 19.91-10.

The US $ 3.6 billion stock option is reflected in its own value recognition. Considering that the company also needs to manage multiple attributes such as soundness + high dividends underestimation + openness of the fashion consumer goods extension imagination, it maintains a “buy” rating.

Risk Warning: Offline sales are below expectations, new business development is below expectations, and brand collaboration is below expectations