Xinbao Shares (002705): Business Performance Optimized for Domestic Sales
The company disclosed the 2019 performance report: revenue of 9.1 billion, +8 in ten years.
1%; net profit attributable to mother 6.
900 million, previously +36.
Corresponding to 2019Q4: 2.3 billion in revenue, +4 in ten years.
8%; net profit attributable to mother 1.
700 million, previously +16.
Performance was basically in line with expectations.
First, domestic sales are accelerating. It is expected that the contribution of Mofei will mainly increase the performance of domestic sales. Exports will grow steadily.
The company’s preliminary domestic sales revenue in 2019 increased by about 50%, mainly driven by the rapid growth of the independent brand Mofei.
The export sales revenue has been steadily increasing due to the impact of Sino-US trade relations, with an annual growth rate of about 3-5%. The growth rate of export sales in the fourth quarter is related to the company’s initiative to screen orders. It has the advantage of continuous research and development and manufacturing.stable.
Own brands use content marketing to create explosive models and achieve ultra-high-speed growth.
The company’s Mofei brand has surpassed social media channels such as Xiaohongshu and Douyin, and has successfully created explosive products such as online red juicers and multi-function pans, achieving ultra-high-speed growth. It is estimated that its single-brand revenue growth rate has reached 300%.
We believe that the company’s own brand will continue to drive rapid growth in domestic sales revenue, while another independent brand, Dongling, is expected to replicate Mofei ‘s explosive product strategy and is expected to resume growth in 2020.
ODM cooperates with Xiaomi and Mingchuang to explore the market.
The company actively cooperates with Xiaomi, Mingchuang, Pinduoduo and other companies in the ODM business, and is committed to further expanding the scale and establishing scale advantages through its channels.
Second, profitability improved, benefiting from the optimization of business structure and reduction of exchange losses. The company’s profitability improved.
According to the announcement, the company’s net interest rate in 2019 is approximately 7.
5%, +1 each time.
6pct; 2019Q4 net profit is about 7.
3%, ten years +0.
The increase in profitability is expected to be mainly due to the increase in the proportion of high gross profit margin businesses and the decrease in foreign exchange losses.
According to the announcement, the company’s domestic gross profit margin in 2018 was about 32%, far exceeding the company’s overall gross profit margin of about 20%.
The proportion of the company’s domestic sales revenue increased from 13% in 2018 to 20%, and it is expected to continue to increase in the future. The structural optimization brought by the increase in the proportion of high-margin business will continue to improve the company’s profitability.
At the same time, benefiting from the impact of the depreciation of the RMB, the company’s foreign exchange loss in 2019 decreased by approximately 56 million yuan. The structure adjustment + incentive plan helped the company gradually grow the brand division structure and ensure the response speed.
In 2019, the company’s landing brand division structure adopted a new product development framework suitable for the Internet to ensure rapid response to demand, which is more conducive to the company’s subsequent explosive products.
The fund incentive plan motivates employees.
In 2019, the company released its annual performance incentive fund plan, with the incentive conditions as follows: the net profit for the assessment in 19/20/21 is not less than (inclusive) 5 respectively.
29 trillion, the domestic main income is not less than (inclusive) 13.
It is expected that the incentive plan will further motivate employees.
Fourth, profit forecast The company has a strong ability to build explosives and has a wealth of new products.It is expected 杭州夜网论坛 that the internal sales business will continue to grow rapidly under the driving of independent brands, thereby continuously improving the company’s profitability; external sales will enable the company to accumulate R & D and manufacturing advantages for many years and promote stability.
Expected net profit attributable to mothers in 2019-2021.
900 million, 8.
0 billion, 9.
1 billion, the same increase of 36%, 16%, 14%; EPS0.
86 yuan, 1.
00 yuan, 1.
14 yuan, corresponding to PE23 / 20 / 17x, maintain “Buy” rating.
Risks remind that independent brand building exceeds expectations, fluctuations in export orders, and exchange rate changes