Semir Apparel (002563): Barabara Children’s Wear maintains rapid growth

Semir Apparel (002563): Barabara Children’s Wear maintains rapid growth

I. Events: The company announced its 19-year interim report, and its performance basically met our expectations of the H1 2019 company’s revenue 82.

1.9 billion (+48.

57%); realized net profit attributable to mother 7.

2.2 billion (+8.

20%); net profit of non-attributed mothers 6.

6.9 billion (+8.

02%无锡桑拿网), the company’s performance basically meets our expectations.

The company’s revenue has achieved rapid growth, mainly due to the consolidation of KIDILIZ, so the children’s clothing revenue has increased by 81 each year.


If KIDILIZ consolidation effect is excluded, the company’s revenue in 19H1 is 67.

1.5 billion (+21.

38%), expected to achieve net profit attributable to mother 8.

3.6 billion (+25.

20%) to achieve solid growth.

By quarter, 19Q2 achieved revenue of 41.

10,000 yuan (+35.

81%); net profit attributable to mother 3.

7.5 billion (+5.

68%); deduct non-attributed net profit 3.

5.6 billion (+5.


1. According to brand breakdown: 1) Semir headquarters (excluding KIDILIZ) 19H1 achieved revenue 66.

7.3 billion (+21.

47%), of which Semir Leisure achieved revenue of 29.

4.4 billion (+12.

15%), Barabara children’s clothing achieved 37 revenue.

3 billion (+29.


2) KIDILIZ clothing business realized revenue14.

8.3 billion.

2. According to the breakdown of channels: 1) Online channels: The company’s 19H1 e-commerce channels achieved revenue of 21.

6.7 billion (+35.

06%), achieving rapid growth.

Among them, Senma headquarters (excluding KIDILIZ) achieved online revenue of 20.

8.5 billion (+29.

9%), KIDILIZ achieved online revenue of 8228.

290,000 yuan.

2) Offline channels: The company’s 19H1 offline channels achieved revenue of 59.8.8 billion (+53.

98%): of which direct sales channels achieved 14.

1.6 billion (+72.

14%); joining the channel reached 4.4 billion (+43.

49%); affiliate channels achieved 1.

7.2 billion.

Looking at the breakdown: ①Sema Headquarters achieved revenue of 45 offline.

8.9 billion (+17.

98%): Direct sales channels 8.

8.3 billion (+7.

36%), achieving solid growth; joining channels 37.

50,000 yuan (+20.

83%), achieving rapid growth.

② KIDILIZ realized offline revenue of USD 1.4 billion.

Among them, direct sales channels achieved revenue5.

3.3 billion, the franchise channel achieved revenue 6.

9.5 billion yuan, affiliate channels achieved 1.

7.2 billion.

3) Calculation: According to the proportion of Semir Leisure and Barabara Children’s Wear, we estimate that the revenue of Semir Leisure e-commerce in 19H1 is about 9.

500 million (+ 25%), Semima Leisure is about 2.5 billion (+ 13%); Barabara e-commerce revenue is 1.1 billion (+ 34%), and Barabara offline is about 2.5 billion (+ 22%).

In general, the 19H1 company’s Senma casual wear achieved steady growth; children’s wear continued to achieve rapid growth, reflecting the company’s management improvement in previous years and the strong position of children’s wear, leading the company’s performance to continue to rise.

Second, the single store area continues to increase, and it is expected that the same store will achieve high single-digit to low double-digit growth.

1. Semir Headquarters: As of 2019H1, the number of Semir Headquarters stores is 9,404, see an initial net increase of 281; the total store area is 178.

350,000 square meters, an increase of 10 in ten years.

50%, the same store is expected to achieve high single-digit or low double-digit growth.

1) Semir Leisure: As of H1 2019, the number of Semir leisure stores is 3858, which is a net increase of 28 in the initial stage; the store area is 90.

480,000 square meters, an increase of 5 in ten years.

17%, the average store area is 234.

5 flat, growing 5 per year.


2) Barabara: As of 2019H1, the number of stores is 5,546, and a net increase of 253 is mentioned at the beginning; the total area of the stores is 87.

880,000 pings, an increase of 16 in ten years.


The average store area is 158.

45 levels, an increase of 4 per year.


2. KIDILIZ: As of H1 2019, the number of KIDILIZ stores is 757, a net decrease of about 25 in the initial period; the total area of the stores is 7.

280,000 flats, a decrease of 4 in the initial baseline.

The average store area is 96 square meters, with little change from 19 years.
Third, the company ‘s gross profit margin increased, and its net profit margin increased. The gross profit margin of the company ‘s 19H1 products was 44.

84% (+ 6.

49pct), with 19Q2 gross profit margin of 48.

00% (+10.

29pct). The increase in gross profit margin is mainly due to the following: 1) The KIDILIZ brand with a higher gross profit margin is consolidated to increase the overall gross profit margin. The gross profit margin of the KIDILIZ Group is calculated to be 66.

01%; 2) If the influence is eliminated and published, the proportion of Balaballara children’s clothing with a higher gross profit margin in Semir Headquarters is 18%.

Around 6pct, the overall gross profit margin level is increased in the axial direction.

19H1 Semir’s gross profit margin was 40.

10% (+1.

75pct), has improved.

Expense rate: The expense rate during the company has increased.

Company 19H1 sales / management + R & D / financial expenses: 23.

89% (+6.

78pct), 6.

74% (+2.

45 points), -0.

79% (+0.

29pct), the overall proportion is 29.

84%, up 9.

54 points.

Of which 19Q2 sales / management + R & D / financial expenses: 24.

21% (+7.

39pct), 7.

58% (+3.

78pct), 0.

13% (+0.

54pct), the overall proportion is 31.

08%, up 10.

87 points.

In addition to the impact of the French KIDILIZ consolidation, the increase in the company’s selling expenses accompanied the business growth, employee expenses, leasing expenses, advertising expenses, transportation and miscellaneous expenses, service fees, etc .; the increase in management expense ratio was mainly due to the increase in employee expenses;The slight increase was mainly due to the increase in bank interest rate income.

Asset impairment losses were 2.

3.7 billion (+39.

41%), a rapid growth rate, mainly due to the increase in inventories, and the corresponding increase in inventories of depreciation.


Net profit margin: As the company’s expense ratio increased by more than the gross profit margin, and the asset impairment loss improved, the company’s 19H1 company’s net profit margin declined.

19H1 net sales margin was 8.

67% (-3.

23pct); 19H1 return to the net interest rate is 8.

79% (-3.
28pct); 19Q2 sales net profit margin is 8.
97% (-2.

62pct), the net profit attributable to the mother is 9.

15% (-2.

60pct); if we cancel the impact of KIDILIZ consolidation, the net profit attributable to the mother is expected to be 10.

16% (-1.

9pct), the decline has narrowed.

Fourth, the accounts receivable turnover rate does not change much, prolongs the cycle, and the operating net cash flow is reasonable and reasonable inventory: the company’s inventory for the consecutive 19H1 is 42.

00 ppm, an increase of 58 over the same period in 18 years.

97%, the improvement of inventory was mainly due to the increase in KIDILIZ’s consolidation and sales, and the corresponding increase in inventory.

In terms of inventory turnover days, the inventory turnover days for 19H1 was 171.

05 days (+38.

43 days), turnover efficiency has declined.

From the perspective of inventory price loss, the company’s 19H1 inventory price loss was 2.

3.7 billion (+38.


Accounts receivable: The amount of accounts receivable of the company in 19H1 was 15.

4.7 billion (+73.

97%), mainly due to the merger and transfer of accounts receivable into the KIDILIZ Group;

80%, mainly due to the strengthening of franchise credit management in this period, due to timely recovery of payment.

From the ageing structure, accounts receivable within 6 months accounted for 78.

04% (+13.

44 pct), the percentage increase is 6 months to 1 year, and the percentage is 12.

97% (-13.

90pct), accounting for 4 in 1-2 years.

23% (-0.

60pct), accounting for 1 in 2-3 years.

03% (+0.

08pct), with a share of 3 over 3 years.

73% (+0.

98pct), the aging structure is more reasonable.

Judging from the days of accounts receivable turnover, the number of days of accounts receivable turnover in 19H1 was 171.

05 days (+0.

72 days), a decrease of 0 from the beginning of the period.

In 03 days, the change was small.

Operating cash flow: The net operating cash flow of the company in 19H1 was -4.

180 thousand yuan, -831 in the same period of 18 years.

The net increase of 890,000 was mainly due to the increase in business during the period, the increase in payment of leasing fees, advertising expenses, transportation and miscellaneous fees, and service fees during the current period and the merger of the French KIDILIZ Group in the current period.

In terms of splits, the company received 90 in cash for selling goods and providing labor services in 19H1.

6.1 billion (+35.
18%), growing rapidly every year.
If we look at it for five years, the company’s total net profit attributable to mothers / total operating cash flow ratio from 2014 to 2018 is 1: 1.

19. It can be seen that the operating cash flow matches the value of net profit attributable to mothers. In the long run, the cash flow is relatively large and reasonable.

19Q2 operating cash flow was -3.

8.5 billion, little change from the same period in 18 years.

Fifth, the Semir brand is renewing its brand positioning, and the children’s business segment further optimizes the business mix.

First of all, the Group renewed the positioning of the Semir brand, and broadened the population and categories.

From the previous position of “owning fashionable clothes at low prices” as a brand value; the positioning of youth casual fashion clothing brands centered on individualized clothing needs for 16-24 year-olds has shifted to the value value of “quality in daily life” as a brand.An 18-35 year-old mass-oriented quality-improved lifestyle that focuses on the daily lifestyle brand of the masses.

In addition, the seed store program was launched to establish an ideal store model, promote the concept store, experience store building and upgrade, and extend the stay time of consumers in the store.

Combining new series of well-known IP cross-border cooperation products, conducting new brand communication activities, continuously expanding brand influence and exposure, and improving the brand’s reputation in consumers’ minds; tapping the potential needs of consumers, managing consumer data, and improvingConsumer store shopping experience.

②Children’s clothing brands: The company has further optimized children’s brands and developed different brands through differentiation to meet different needs of the market.

The company builds a combination selected by Barbara as the leading brand and Macalle as a market segment. In the high-end market segment, the company focuses on creating a combination of omni-channel retail businesses based on the CATIMINI brand and ABSORBA brand of the KIDILIZ Group.CATIMINI and ABSORBA brands have opened stores in several domestic cities.

Maintain Buy rating and maintain sustainable profit forecast.

It is expected that the company will realize net profit in 2019-2021.

09 million yuan, 22.

1.4 billion, 26.

20,000 yuan, an increase of 12 in ten years.

73%, 15.

97%, 17.


EPS is expected to be 0 in 2019-2021.



96 yuan, the corresponding PE is 17.




Maintain the company’s 20x PE and maintain target price of 14.

2 yuan.

Risk warning: KIDILIZ may drag down the company’s business; inventory and asset impairment will increase significantly; macroeconomic impact on consumer confidence.