In the first quarter of last year, Semir apparel net profit increased by 25% over the same period. In the future direction, Semir apparel said it would try a more flexible supply chain.

The company achieved 2016Q1 revenue of 1 billion 920 million yuan, an increase of 16.2% over the same period last year, and realized a net profit of 240 million yuan, an increase of 24.5% over the same period last year.

Benefit from

The proportion continued to rise, the gross profit margin was 36.9%, up 1.3 percentage points compared to the same period last year, and the overall cost rate was 20.3%, up 1.9 percentage points compared with the same period last year. The main reason is that the management fee grew by 21% faster than the same period.

The company's operating profit increased by 18.7% over the same period last year, and the net profit grew even faster as the effective tax rate dropped from 26% in the same period last year to 26%.

Steady growth in revenue, try more flexible supply chain

We estimate that Q1 children's clothing income is still more than 20% faster growth, casual wear growth rate is close to 10%.

It is worth noting that the loss of company assets impairment is 19% lower than that of the same period last year.

In the context of better Revenue trends, the company will try a more flexible supply chain, starting from women's clothing products. In the second half of this year, we will try about 30% fast response supply chain. This part of the product cycle will be shortened from the 8-9 month cycle to 2 months, and the company will co-ordinate the distribution and replenishment.

We think this will be

Another important step in supply chain optimization is to build different advantages of different products from the previous quality improvement to the current rapid response, so as to meet the differentiated needs of consumers.

More dimensions use online traffic

company

Business has maintained rapid growth, and revenue grew by 84% in 2015, contributing 20% of the revenue. We expect this share to continue to rise in 16 years.

We believe that the electricity supplier is no longer a channel for companies to go inventory, and about half of the products are new products.

Based on the advantages of the supply chain, the company will further develop high-quality products online and cooperate with the social platform to take advantage of the flow bonus of more dimensions.

Valuation: target price is 18.2 yuan, maintain "buy" rating, we use DCF tool to carry out cash flow discount (WACC=6.8%), deduce target price 18.2 yuan, maintain "buy" rating.