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Pacific Bird (603877) 2019 Semi-annual Report Review: Q2 Revenue Turns Positive, Expected Second-half Results to Continue to Improve

Pacific Bird (603877) 2019 Semi-annual Report Review: Q2 Revenue Turns Positive, Expected Second-half Results to Continue to Improve

This report reads: The company’s second-quarter revenue resumed growth, marginal improvement improved, and gross profit margin increased significantly. The increase in advance receipts indicated a good consolidation in autumn and winter, and maintained an overweight rating.

Investment Highlights: Maintain Overweight Rating: Considering the tightening of clothing consumption environment, lower EPS to 1 in 2019-2021.

36 (-0.

05) / 1.

53 (-0.

10) / 1.

73 (-0.

11) Yuan, thinks that the industry evaluation center has slightly declined, and considers the company’s store adjustment in the first half of the year, with reference to the industry’s 12 times PE in 2019, with a target price of 16.

35 yuan.

Q2 sales resumed growth and a healthy recovery appeared.

The company achieved operating income 31 in 2019H1.

20 billion, a decrease of 1 every year.

54%, net profit attributable to mother 1.

32 billion (yoy-33.

06%), and performance was basically in line 南京龙凤网 with expectations.

Q1 / Q2 revenue quarter -4.

46% / + 1.

99% in the second quarter effectively reversed the revenue growth trend, the company showed a recovery trend.

Overall sales gross margin was 57.

07%, increase by 1 every year.

29pct, a significant improvement, mainly benefit from the increase in women’s gross profit margin.

Focus on the development of shopping malls and Ole, the number of stores is expected to resume growth in the second half of the year.

In the first half of the year, the company opened 73 directly-operated stores, closed 240 franchised and affiliated stores, and reduced the number of stores by 167 to 4,427.

Focus on the development of shopping mall channels, the latest number of shopping malls exceeds 1,750.

Get to know Ole’s channels and actively digest inventory.

It is expected 南京夜网论坛 that the overall number of stores will return to positive growth in the second half of the year after the period of overall store closures in the first half of the year.

The publicity will not decrease in the long run, which will benefit the brand, and the increase in advance receipts indicates that the order in autumn and winter is in good condition.

Despite the decrease in revenue, the company has continued to promote its brand and made its debut at Fashion Week to showcase Chinese design.

Larger brand marketing will increase the sales expense ratio in the short term. In the long run, it will help the company to expand its popularity and expand its consumer base.

The increase in advance receipts for autumn and winter orders shows that the dealers have recognized the products in the second half of the year, laying a good foundation for the autumn and winter clothing sales.

Risk warning: clothing consumption is less than expected, and store development exceeds expectations.