Disu Fashion (603587): Endogenous extensions drive steady revenue growth, asset impairment losses, write-offs boost profit growth

The event company disclosed its annual report and quarterly report, and realized revenue of 21 in 2018.

00 ppm, a ten-year increase of 7.

94%, achieving a net profit of 5.

0.74 million yuan, an increase of 19 in ten years.

59%, basic profit income 1.

55 yuan, it is planned to pay 10 yuan (including tax) for every 10 shares.

In Q1 of 2019, the company achieved revenue of 5.

84 ppm, an increase of 13 in ten years.

53%, achieving net profit1.

950,000 yuan, an increase of 32 in ten years.


Key points of investment: Operating income has steadily increased, and asset impairment losses offset the increase in profit growth. In 2018, the company’s operating income increased steadily, with a growth rate of nearly 8%.

The increase in the average price of each brand, the expansion of offline channels, and rapid online growth have pushed the company to maintain a steady growth in the vertical background of the overall clothing terminal retail growth.

The initial increase in net profit attributable to mothers increased by nearly 20%, mainly due to the company’s housing disputes in 2017, the recognition of asset impairment losses of US $ 100 million, a low base, and partial write-offs in 2018, driving up the profit growth in 2018.

Without considering the impact of 2017, the company’s annual compound net profit attributable to the parent will grow at a compound annual growth rate of approximately 5% from 2016 to 2018.

In Q1 of 2019, the company achieved 14% revenue growth under the warm winter background. Both online and offline, the endogenous and epitaxial performance was good.

The growth rate of net profit attributable to mothers was 33%, which was significantly higher than the revenue growth rate, mainly due to the receipt of government-related government subsidies. The government subsidy was confirmed in the second quarter last year, and quarterly misalignment increased the profit growth rate.

Endogenous extension promotes the steady growth of each brand’s revenue: In terms of brands, in 2018 DA, DM, DZ, and RZ brands accounted for about 59%, 8%, 32%, and 1% of revenue, respectively, and each brand achieved revenue growthAbout 7%, 15%, 7%, 242%.

Among them, the increase in average price promoted the steady growth of DA and DZ brands in 2018 and the rapid growth of DM; the revenue of RZ brands decreased and is still in the incubation period.

In terms of different channels, in 2018, the company’s online and offline revenues accounted for 12% and 88% of revenue, respectively, and achieved revenue growth of 31% and 5%, respectively. The company’s clothing online channels are competitive.

Channel expansion and average price increase ensure offline growth.

At the end of 2018, the number of company stores increased by 2.

3% to 1062, mainly DA, DZ brand, DA, DM, DZ brand stores accounted for 58%, 5%, 36% respectively.

The number of DA, DM, DZ, and RA brand stores initially changed by -0.

2%, 15%, 4%, 30%, channel expansion drives offline revenue growth.

Asset impairment writes up net profit margin: In terms of profitability, in 2018, intensified market competition led the company to participate more in shopping mall promotions and other activities, reducing gross profit margin.

94pct to 73.


Increased store rents increase the sales expense ratio2.

37pct to 33.

68%, the increase of men’s clothing R & D expenses and consulting, and the increase in depreciation expenses increased management and R & D expenses to account receivables by 0.

85pct to 8.

75%, financial expenses remain -1.

41%, the overall period expense ratio increased by 3.

39pct to 41.


The large amount of inventory clearing in 2017 made the 2018 inventory age structure good, overlapping the high base of asset impairment in 2017 and the return in the second quarter of 2018. Asset impairment losses accounted for a decrease in revenue8.

72 points to -2.05%.

Eventually the company’s net interest rate increased by 2.

66 points to 27.


In terms of inventory, the company’s inventory increased by 1 at the end of 2018.

16%, accounting for 13% of revenue from 2017.

09% acceptable 12.

27%, the overall scale is well controlled.

In terms of cash flow, the company’s net cash flow from operating activities increased in 20184.

2% to 5.

85 ppm, of which cash inflows from operating activities increased by 5.

8% to 25.

50,000 yuan, an increase of 6 over.

2% to 19.

7 trillion, good cash flow.

The women’s wear market continues to grow rapidly, and the prime market 深圳桑拿网 covers the leading position in the market: women’s wear is the main category of the conventional apparel market. The size of the women’s wear market in 2017 reached 9232 trillion US dollars, and the compound growth rate from 2017 to 2021 is expected to be nearly 4.

4%, higher than the growth rate of men’s clothing.

The company has competitiveness in the junior mid- to high-end women’s wear market, and the main brand’s market share in 2015 ranked third.

The company’s fashion and design style are recognized by consumers and the company’s competitive foundation.

The company’s leading market scale maintains steady performance growth through channel optimization and category extension.

In addition, the elasticity of women’s consumption is relatively high, and the domestic economic recovery may boost the growth rate of women’s companies.

Investment suggestion: We predict the company’s annual income from 2019 to 2021 will be 1.

63, 1.

81 and 2.

01 yuan.

Return on net assets were 18 respectively.

4%, 17.

9% and 17.

5%, the current company PE (2019E) is about 17 times.

Give “overweight-A” recommendations.

Risk reminders: Market competition puts pressure on gross profit margins; brand promotion expenditures increase sales expenses; domestic apparel retail sales increase faster.