Po Laiya (603605): Company dynamic comment on strong online performance, faster-than-expected growth

Po Laiya (603605): Company dynamic comment on strong online performance, faster-than-expected growth

High-speed revenue growth, performance growth slightly exceeded expectations: the company achieved revenue in 201823.

610,000 yuan, an increase of 32 in ten years.

43%; realize net profit attributable to shareholders of listed companies.

870,000 yuan, an increase of 43 in ten years.

03%.

Among them, 2018Q4 achieved revenue of 8.

10,000 yuan, an increase of 40 in ten years.

62%; realize net profit attributable to shareholders of listed companies.

500,000 yuan, an increase of 40 in ten years.

46%, slightly exceeding market expectations.

It is planned to distribute 4 shares for every 10 shares to all shareholders in 2018.

3 yuan cash bonus.

The gross profit margin increased, and the expense ratio decreased overall: The company increased its gross profit margin by adjusting product structure and expanding product categories2.

3pct to 64.

03%, the gross margin level is leading among domestic comparable companies; the net profit margin increased by 0.

88pct to 12.

14%.

The company’s period expense ratio decreased by 1 every year in 2018.

04pct, in which the sales expense ratio increased by 1.

86pct to 37.

52%, mainly due to the increase in marketing expenses and the increase in annual advertising expenses during the current period;

32pc to 7.

26%, mainly due to the reduction in management expenses under the platform mechanism; the R & D expense ratio fell slightly to 0.

12pct to 2.

17%; financial expense ratio decreased by 1.

46 points to -0.

54%, mainly due to a decrease in interest expenses and an increase in wealth management income.

Net operating cycle shortened and operating cash flow improved: The company’s net operating cycle was shorter than in 2017 by 33.

5 days, mainly because the inventory turnover days / accounts receivable turnover days decreased by 16 respectively.

4/2.

0 days, the number of compliance account turnover days increases by 15 each year.

2 days.

In 2018, the company’s net operating cash flow increased by 53 each year.

47%, mainly due to the rapid increase in the scale of income, and the first batch of goods sold by Youzilai produced a certain credit period.

Steady growth of the main brand and rapid development of Youzilai: The company has expanded its multi-brands with “Polaya” as its core, and its brands include “Polaiya”, “Youzailai”, “Yue Fuyu”, “Hanya”, “Youya”, “Cat Rose”, “TZZ”, etc.

In 2018, the percentages of revenues of Perla / Youzai / Other brands were 88.

8% / 5.

6% / 5.6%.

Benefiting from the brand image upgrade and product rejuvenation, the main brand Polaia achieved revenue of 20%.

0.94 million yuan, an increase of 32 in ten years.

38%; through vigorously developing the operation model of single-brand stores, Youzilai achieved revenue1.

33 ppm, an increase of 41 in ten years.

46%; other brands achieved revenue1.

3.2 billion, an annual increase of 24.

84%.

Online growth is strong, and the speed at which the growth rates of various channels are combined: The company adopts a combination of online and offline sales models, and the online / offline revenue ratio is 43.

6% / 56.

4%.

On the front end, online channels maintain a rapid growth trend, with an annual growth rate of 59.

9%.

Among them, direct marketing platforms such as Tmall increased by 90.

2%, JD.com, 武汉夜生活网 Vipshop and other distribution platforms also increased 41.

0%.

At the same time, the growth rate of offline channels has accelerated, increasing by 16.
.

86%.

Among them, CS / Shangchao respectively increased by 7.

45% / 24.

66%, the growth rate has accelerated compared with 2017.

The revenue share of CS / Supermarket / Single-brand stores / other channels is about 42.

5% / 8.

5% / 4.

9% / 0.

6%.

Investment suggestion: The company is one of the leading cosmetics companies in the country. It maintains high growth online and accelerates offline growth. In the future, driven by the “traditional offline + single-brand store + e-commerce” troika, the revenue scale will help maintain rapidGrowth trend, predicting that the company’s EPS for 2019-2021 will be 1.

93 yuan / 2.

51 yuan / 3.

14 yuan,杭州夜网 corresponding to PE of 33X / 25X / 20X, maintain “recommended” investment rating.

Risk reminder: the industry’s prosperity is lower than expected, industry competition is intensified, channel operating costs are rising too fast, product quality risks, and channel expansion is less than expected

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