Feike Electric (603868) 2019 Interim Report Review: Double Pressure on Revenue and Profit Expect Channel Adjustments to Bring Operational Improvements
[Investment Highlights]The company released its 2019 interim results, and the company achieved operating income of 17H1 in 2019.25 ‰, the average level five years ago.01%; net profit attributable to mother 3.37 ‰, 15 years ago.43%.The company achieved revenue in Q2 20198.79 ppm, a five-year average of 5.59%; net profit attributable to mothers1.73 ppm, a ten-year average of 22.53%.Q2’s revenue continues Q1’s growth trend, and the decline has expanded. The decline in profits has slightly exceeded market expectations. Electric shaver revenue has dragged down revenue, and the growth of e-commerce has been weak.In the first half of the year, the company’s electric shavers achieved revenue11.30 ppm, 10-year average of 10.Although 95%, the revenue of another main product, hair dryer, has increased.99%, but its revenue accounted for only 17%.In terms of gross profit margin, electric shavers and hair dryers increased by -0.59/5.81 points.In terms of channels, 2019H1 company’s e-commerce channel realized revenue9.600 million, accounting for 55% of total revenue.80%, zero for ten years.83%; offline revenue 765 ppm, a ten-year average of 9.79%.We analyze that the domestic consumer demand has performed poorly this year, and the intensified competition in the online market has led to the company’s further adjustment of offline wholesale channels in the second quarter, which has a certain impact on offline revenue, and the decline in offline revenue has been greater than online.However, since the first half of the year, the company’s performance of new extension cord sockets has achieved a profit of 22.91 million yuan. It is expected to gradually increase volume in the future. The gross profit margin of the product will also improve with the increase in scale effects. The increase in selling expenses led to a double decline in gross net profit margin.In 2019H1, the company’s gross profit margin fell by 0 in ten years.75pct, we analyze the price reduction promotion to reduce the target price to suppress the increase in the company’s razor price, to replace the reduction in the gross profit margin of small household appliances, the gross profit margin of new extension cord sockets, and a certain drag on the overall gross profit margin.In terms of expenses, the company’s promotional expenses increased in the first half of the year, which led to an increase in the sales expense ratio.47 points to 10.99%, indicating that the company still adheres to a proactive marketing strategy and the management expense ratio is changed to zero.69pct to 3.19%, the financial expense ratio increased by 0 in ten years.43pct to -0.99%, the R & D expense rate increased in ten years.64pct to 1.79%, net clarity was extended twice under the combined influence.44 points to 19.48%. Significant growth in inventory.The 2019H1 company’s inventory has grown by 97 in ten years.31%, a significant increase. We analyzed that the company had strengthened its off-season inventory in the early season after experiencing a shortage of workers due to overlapping recruitment. At present, the company’s inventory is still at a reasonable level of 2 months.Construction in progress increases by 3 per year.US $ 4.4 billion, mainly due to the company’s increased civil occupation at the Songjiang production base and Zhejiang Lishui Lijingyuan base. [Investment suggestion]The company has been affected by offline channel adjustment in the past two years, and its revenue growth rate has been significantly larger.However, from the perspective of profitability, the company’s main products, electric shavers and hair dryers, still maintain high gross margins, indicating that the company is still in the core competitiveness of alternative products.Looking forward to the future, we believe that the current 杭州桑拿 channel adjustment is the only way for the company to maintain good growth. The transfer channel adjustment is gradually implemented, and offline revenue can be expected to improve. At the same time, the company is actively promoting the optimization of its internal organizational structure to promote the company’s management and operating efficiency.Promotion. Taking into account that the company’s internal channel adjustment in the next few years will take some time, and the current internal consumer demand boosted less than expected, we revise the company’s profit forecast and expect the company to achieve operating income of 40 in 19/20/21.49/42.12/45.07 million yuan, net profit attributable to mother 8.45/8.70/9.3.4 billion, EPS1.94/2.00/2.14 ‰, corresponding to PE 18/18/17 times, maintaining the “overweight” rating. 都市夜网 [Risk Tips]Industry competition is intensifying; new product expansion is less than expected; domestic demand is weak.