Brand clothing business achieved 694 million yuan in revenue in the three quarter, up +2.3% compared with the first half of this year, and the decline in -7.2% compared with the previous year.

Meanwhile, at the end of the three quarter, there were 3124 sales outlets, 113 less than the beginning of the year, but the business area increased by 10054 square meters compared with the beginning of the year.

We believe that the company's strategy of opening stores and the O2O upgrade of sales terminals are beginning to show results.

In the next five years, the company will invest 10 billion yuan in the clothing sector for fabric and process.

Strengthen and improve sales channels.

We believe that with the channel adjustment, the remodeling of the main brand YOUNGOR and the continuous growth of the sub brands, the decline of the men's wear plate will gradually shrink, and the performance is expected to rebound in 2018.

The volume of real estate business is still booming, and the profit of low land reserve will be gradually released.

Affected by the project development cycle, the third quarter revenue of the real estate sector was 960 million yuan, up -64.9%.

But the pre-sale in the three quarter is still good.

1-9 months, the main area of development of the company is located in the six District of Ningbo commercial residential area +40%, growth rate was unchanged from the first half.

Company real estate plate 1-9 months to achieve pre-sale amount of 4 billion 950 million yuan, up -13.6%.

We believe that although the pre-sale amount of the real estate sector has declined year by year, it is still at a relatively high level.

At the same time, the company's land reserve price is low, and the risk of project impairment is significantly reduced, so the real estate sector's contribution to the group's profits will remain stable in the next two years.

The 16-18 year performance was 1.80 yuan / share, 1.88 yuan / share, 1.93 yuan / share respectively.

The company's current stock price corresponds to a 17 year P/E of 8.1x, which is slightly below the historical average valuation of the company in the past five years.

We believe that as the company continues to invest in the men's wear sector, the decline in men's clothing business will gradually shrink and return to the growth track.

At the same time, the dividend yield of the company is 5.6%, which also provides a strong margin for the stock price, so we maintain the buying rating of the company.

Risk warning

The risk of fluctuations in the investment sector and the downside risks of the real estate industry.