Smith Barney Fashion Research Bulletin

2010/6/29 12:21:00 42

[summary of reports]

1. the new brand MC will adjust its pace and the proportion of input and output will be improved significantly.

After 08 years' listing of new brand

Direct network

Rapid expansion, resulting in a significant increase in related sales costs. Last year, MC brand channel construction cost about 500 million yuan, team building cost about 40 million, brand publicity cost around 40 million, and revenue contributed about 360 million yuan.

The company plans to slow down the investment of MC brand in the future and introduce franchisees in time. It is expected that revenue will maintain more than 50% growth in recent years, and the sales cost rate will decrease.

2. old brand MB will continue to be brilliant.

Based on the high value of the old brand MB positioning the regional center of gravity (see the textile and garment industry special report: the investment logic of "upgrading") and the good expectations of this year's "fist product" debut, we believe that the old brand will continue to grow rapidly in the future. It is estimated that the income of this year and next year will remain above 25%, and the gross profit margin will also increase.

Operational efficiency

And gradually improve the design ability.

Three

Profit forecast

And investment rating: strongly recommended based on the above analysis, we expect the company's 10-12 years' EPS to be 0.67, 1.22, and 1.81 yuan respectively. Based on the brand strength advantage and future business strategy and brand positioning regional consumption ability, we think that we should give 30-35 times PE more reasonable, corresponding to 11 years' share price range from 36.6 to 42.7 yuan, and raise the investment rating to "strongly recommend"!