Jiu Muwang (601566): Expenses dragged down profit during the third quarter, major brands resumed net openings

Jiu Muwang (601566): Expenses dragged down profit during the third quarter, major brands resumed net openings

Core point of view The company’s operating income and net profit increased by 5 in the first three quarters of 19 respectively.

37% and 8.

88%, profit growth was mainly due to the increase in investment income contributed by the sale of equity in Caitong Securities (the equity of Caitong Securities has been completely sold).

28%; in the third quarter, the company’s operating income 杭州夜网increased by 1 every year.

64%, net profit drops by 35 every year.

81%, revenue and profit growth twice replaced in the first half of the month.

In terms of brands, in the first three quarters, the revenue of the Jiumuwang brand increased slightly by half a year.

53%, the gross profit margin was reduced relative to 0.

40pct, net opening of 45 stores (54 direct sales increased, 9 franchises decreased); thanks to terminal and product upgrades, FUN brand revenue increased in the first three quarters.

74%, gross margin decreased by 4.

67pct, net opening of 11 stores (3 decrease in direct sales, 14 increase in franchise); other brands at the end of the third quarter totaled 161 stores, of which ZIOZIA brand growth rate reached 327%, the number of stores reached 119

In the first three quarters, the company’s online sales increased by 7.

38%, sales accounted for 9.

86%, online sales growth has improved.

In the first three quarters, the company’s comprehensive gross profit margin fell by zero.

23pct, the cost rate increased by 3.

84pct, in which the sales expense ratio and management R & D expense ratio increased by 3 respectively.

51pct and 0.

17pct, mainly due to the increase in new product development expenses; due to the increase in cash paid for purchasing goods and receiving labor services, the net cash flow from operating activities in the first three quarters decreased earlier 68.

93%, the company’s accounts receivable at the end of the quarter decreased by 23 compared with the beginning of the year.

98%, inventory increased earlier13.


In the future, the company will continue to promote terminal retail transformation and structural optimization, strengthen store operations and single store profitability, and increase the proportion of shopping malls. The main brand channel has resumed net opening, and revenue will show steady growth.Growth is expected to become one of the new highlights.

The company’s current total market value is about 6.4 billion, with ample book capital and a high historical dividend ratio. The current corresponding 18-year dividend yield has reached 8.

9%, which is attractive to stable investors.

However, subject to the overall sluggish environment of optional consumption, short- and medium-term performance is expected to be under pressure.

Financial Forecast and Investment Recommendations According to the three quarterly report, we slightly reduced the company’s revenue forecast for the next three years, and the company’s 2019-2021 earnings are expected to be 0.

96 yuan, 0.

84 yuan and 0.

94 yuan (the original forecast for 19-21 is 0.

99 yuan, 0.

89 yuan and 0.

98 yuan), maintaining the company’s 14 times PE in 19 years, corresponding to a target price of 13.

44 yuan, maintaining the company’s “overweight” rating.

Risk warning: the impact of the continued economic slowdown on the company’s terminal retail, and the cultivation of new brands surpassing expectations.