Seven Wolves: First Quarter Net Profit Increased By 36%

First quarter revenue increased by 29%, net profit increased by 36%, slightly exceeding market expectations.

Operating income in the first quarter was 750 million yuan, up 28.97% over the same period last year. On the one hand, business revenue increased because of the increase in orders (basically due to price growth and a small increase in volume); on the other hand, due to the rapid response of the supply chain, a certain degree of early delivery (benefiting from the accuracy of the company's delivery date was more than 96%, and the supplier's funds were sufficient).

Medium term sales revenue growth is expected to fall to the order level.

The total profit before tax was 149 million yuan, up 19.75% over the same period last year.

The net profit of shareholders was 126 million yuan, an increase of 36.03% over the same period last year. Net profit growth exceeded revenue growth. On the one hand, it benefited from a year-on-year increase in investment income by 6921%. The company invested part of its idle idle funds in the investment of bank financial products to obtain more investment income; on the other hand, it benefited from the parent company being recognized as a high-tech enterprise, and the income tax rate dropped from 25% to 15%.

After dilution, EPS0.45 yuan slightly exceeded market expectations.

The gross profit margin dropped slightly and the management fee rate increased.

Gross profit margin fell 0.24 percentage points to 40.63% year-on-year, mainly due to the failure to fully cover the cost increase.

The rate of sales expenses dropped 0.04 percentage points to 10.22%, and the management fee rate increased 1.26 percentage points to 6.24%, mainly because: (1) increased staffing, increased pay level, and increased wages and salaries; (2) the company increased R & D investment, and the research and development cost increased substantially compared with the same period last year; (3) the company implemented the stock option incentive plan, which raised more stock option fees than the same period last year (the first quarter raised about 4000000 fees, and it was estimated that the total annual turnover would be 1000-2000 million and the end of 11 years).

Endogenous growth has many facets.

A number of internal management reform: (1) design and research and development, strengthen the "buyer" plan, product serialization; (2) marketing, continue to increase brand promotion, cross border integration marketing (such as the March 27th st worth's fashion show in Beijing, the entrepreneur Shi Shangxiu in April 8th, the entrepreneurs wear the seven wolves men's wear to show the T show), (3) terminal, improve the terminal store image, upgrade the ERP system, strengthen the fine management, actively digest the inventory (dealers use old goods for new products, headquarters rely on discount and online shopping ways to revitalize the stock); (4) expand the area, increase the proportion of direct sales, increase the subsidy to the franchisee, stimulate their expansion power, and 11 years of new stores are expected to moderate speed. The company has implemented since 2010.

We believe that the above countermeasures will gradually produce positive results.

At the beginning of April, the "2010 China market commodity sales statistics information press conference" was held. The seven wolf jacket was ranked first in the market share for 11 consecutive years.

Agency International

Learning experience to maintain "buy" rating.

March 29th

Announced the acquisition of Kenna clothing in Hangzhou, began acting as a well-known brand in Italy.

In the mainland, business in the near future is to learn the business plan of famous brands, order guidance, terminal management and so on. In the long run, it is expected to increase the new profit growth point in the future.

The spring and summer order will increase by 20%, and the autumn and winter orders will increase by more than 30% to provide a margin of safety. The company forecasts a net profit growth of 15-30% in the first half of the year. We expect 11-13 years EPS to be 1.30, 1.69, 2.17 yuan, and maintain the "buy" rating.