Us Billions Or Billions Of Market Capitalization Companies

Company operating status: the annual revenue and profit growth rate is lower than expected, but the quality of earnings continues to improve. We believe that the third quarter or even the whole year's revenue and earnings will be lower than the beginning of the market expectations. The main reason is that the terminal downturn led to the weak willingness of the franchisee to order, and the company also did not force the goods.

It is worth noting that the company's quarterly report shows that the quality of the company's earnings continues to improve. And other Brand Company in the industry are suffering from terminal pain this year. Stock The situation of the gradual decline of the quality of earnings is different. The company goes ahead with the industry to inventory because of its own reasons, so the pressure of financial statements and terminals is relatively lighter.

We consider the company as domestic. Casual wear The competitive advantages of the first brand in the industry are mainly reflected in the following aspects (1) the spirit of innovation and change and the more internationalized operation ideas. (2) the prospective layout of direct battalion system will benefit gradually (3), and will be more familiar with and adapt to China's multi-level business environment.

In the fierce competition in the industry, we believe that the company's shortcomings are mainly in the following aspects (1) there is still a big gap in the retail management capabilities with international brands. (2) the balance between strategic thinking and tactical execution needs to be improved (3) the importance and support for joining the company need further improvement.

We maintain the following views on the domestic casual wear industry: the demand for the industry itself is still at a normal growth stage. From a certain perspective, the pressure of our local enterprises is that the original extensive growth mode is no longer suited to the needs of international competition and consumer's rising interest. After this round of adjustment, the supply and demand structure of the industry will be healthier. In the medium to long term, it is likely that there will be 100 billion market capitalization companies in the field of local casual wear. Smith Barney It may not be, but from the current brand and business basis, the possibility of the United States is relatively large.

　　 Finance and valuation

We expect the company's earnings per share in the 2012-2014 years to be 1.06 yuan, 1.26 yuan and 1.56 yuan respectively, and the company will recover faster after the macroeconomic and consumer terminals will recover in the future. However, due to the current industry terminal situation and the spring and summer order meeting in 2013, it is expected that the profit growth rate of the company will not increase significantly until the middle of next year. Taking into account the same industry 22.29 times the PE valuation level and the company's short-term profit forecast reduction, give the company 20% valuation discount, corresponding to 2012 18 times PE valuation, target price of 19.08 yuan, reduce the company's rating to "overweight".

Risk warning

The economic recovery process is lower than expected, the risk of lifting the risk of large shareholders and the possible influence of the boss's will on the company's strategy.