Rolls-Royce Home Textiles expects to turn its current performance in the second half

The weak economy superimposed short-term business adjustments and was lower than expected in the first half of the year. The company’s revenue and net profit for the first half of the year were RMB 1.036 billion and RMB 134 million respectively, representing a slight increase of 3.3% year-on-year and a decrease of 17.7% year-on-year, respectively, lower than expected. This is due to the impact of the overall economic sales environment, the terminal sales situation is less than expected, on the other hand, the company’s overall business strategy was optimistic about the consumption outlook forecast for this year at the beginning of the year, and various cost expenditure budgets include new at the beginning of the year. Increases in salary for employees, senior employees, advertising, and expansion and decoration of new stores exceeded revenue growth. In the first half of the year, sales and administrative expenses increased by 26.4% and 32.8%, respectively.

Luolai Home Textiles (SZ:002293) Latest Price: 53.500.270.5% Quotes Trends Money Flow Latest Reports Company News Latest Announcements Stocks of stocks of outstanding stocks Forecasts Long Hubang Huatai Securities (SH:601688) Last updated: 8.250.333.85% Quotes Trends Tracking Money Flow Latest Research Reports Company News Latest Announcements Stocks, stocks, stocks, stocks, stocks, stocks, stocks, stocks In the first half of this year, the number of new stores has increased by about 200, and it is estimated that there will be a net increase of 500-600 in the whole year. At present, the franchisee terminal is in destocking, and terminal sales have double-digit growth. In September, the channel inventory will be further reduced in September. After the channel inventory is determined in the future, the company’s revenue will return to match the growth of the terminal. The process also has to look at the recovery of consumption and the recovery of terminal franchisee confidence.

It is expected that performance will improve in the second half of the year. This year's autumn and winter, about 23% of ordering growth is deterministic, direct-managed group purchase e-commerce growth is good, the full-year expansion plan is expected to be achieved, the base number is not high in the second half of last year, and the peak season market is expected to pick up. We expect that revenue will return to the second half of the year. With an increase of over 20%, the absolute amount of expenses in the first half of this year is relatively large, which does not match the growth rate of income. After the rebound in revenue, the growth rate of net profit will also be greatly improved. We expect the full-year revenue and net profit growth to be 15% and 5.7% respectively this year.

Next year's net profit growth will be higher than income. We believe that the basic logic of demand in the home textile industry has not changed. The company has not changed its leading position in high-end home textile brands. It is our long-term investment target. At present, the company's adjustment in the weak economic environment is more conducive to its discovery and solution to the problem, and it seeks to seek more stable growth with lightness. The company's brand is strong, its texture is good, and its foundation for future performance is back on track. In the later years, the expansion plan will remain unchanged. With the recovery of the overall consumer market, the company’s performance will be more flexible and will reduce its base number next year. It is expected that the revenue will grow by more than 20% next year, and the net profit growth will also be higher than the increase in revenue. speed. We expect the EPS for 2012-14 to be 2.82/3.67/4.61 yuan, and the compound annual growth of revenue and net profit of 25% and 28%. Maintain "overweight" rating.