02/28/2021

Xinbao shares (002705) company comment: rapid growth in domestic sales performance in line with expectations

Xinbao shares (002705) company comment: rapid growth in domestic sales performance in line with expectations

Event: The company released a quick performance report for 2019, and the company expects to achieve 91 revenue.

2 ‰, an increase of 8 in ten years.

1%, net profit attributable to mother is 6.

90,000 yuan, an increase of 36 in ten years.

7%; of which, the income achieved in Q4 was 23.

0 ppm, a four-year increase of 4.

8%, net profit attributable to mother is 1.

7 ppm, an increase of 16 in ten years.

4%.

In 2018, due to the impact of changes in the exchange rate to the US dollar, the company reported losses due to exchange rate forward foreign exchange contracts and losses from changes in fair value totaled 8383.

20 million yuan, 19 years of loss reduction of about 56 million yuan, of which the reduction of related losses is mainly reflected in 19Q4, the overall loss reduction of about 30,600,000 yuan, must have a positive impact on performance.

In terms of revenue, the company’s overall sales growth has maintained steady growth. Q4’s revenue growth rate has been slightly inclined from the previous quarter. We expect it to be related to the external sales revenue, and the decline in Q4 USD exchange will also have a certain impact on the conversion of revenue.

In terms of domestic business, the company 北京夜生活网 gradually realized a growth of about 50%. In terms of breakdown, long-term domestic sales revenue was about 1.8 billion, of which about 10 in the second half of the year.

4 trillion, a growth rate of about 70%.

According to Tmall data, the 19Q4 Mofei brand’s growth rate was 350.

3%, the overall performance is very eye-catching.

In addition, considering that the company launched the performance incentive fund plan in August 19, the plan has been implemented since 19 years, and the maximum annual accrual amount does not exceed 40 million yuan.Reflected in Q4, the maximum growth rate of Q4 profit after adding it back is 39.

8%, considering the impact of the tax rate, we expect the return to the mother’s net profit and profit growth of more than 40%, to a certain extent better reflect the company’s main business’s true profit performance.

The profitability continued to improve, and the explosion model quickly copied the company’s operating profit in 2019, resetting9.

4%, ten years +1.

9 points, net profit margin to mother after deducting exchange loss gains and losses and hedging losses.

1%, ten years +1.

8 points.

The company’s product profitability has been continuously enhanced through measures such as product R & D and design improvement, and continuous advancement in automation construction.

With many years of ODM / OEM experience, it has cultivated strong production + design capabilities, and used the method of explosive products + content marketing to quickly build a brand and gradually promote it to other brands.

Driven by the rapid growth of high-gross Morpheus product sales, the company’s gross profit structure continued to improve.

In the future, we are still optimistic about the company’s layout of new product launches, product replacement, and the rapid replication of successful new marketing models, which are expected to continue to create explosive products.

Investment suggestions The company’s internal sales of independent brands have performed well, and the subsequent introduction of new products is expected to bring greater revenue to the company; the company will actively deploy automation to improve production efficiency and profitability.

We expect a net profit of 6 in 19-21.

9, 8.

3, 9.

700 million (previous value was 6.

6, 7.

6, 8.

9 ‰), the current sustainable corresponding 19–21 year dynamic assessment is 22.

8x, 18.

8x, 16.

2x, maintain “Buy” rating. Risk reminder: The development of the independent brand is less than expected; exchange rate risk; the risk of raw material price fluctuations.