Chao Hongji (002345) 2019 Third Quarterly Report Review: Performance in line with expectations Channel adjustments bring new space for growth

The company’s revenue from 1-3Q2019 increased by 10 per year.

38%, net profit attributable to mothers is reduced by 12 per year.

80% 1-3Q2019 achieved operating income of 26.

69 ppm, an increase of 10 in ten years.

38%; net profit attributable to mothers1.

99 ppm, which translates to a fully diluted EPS of 0.

22 yuan, a decrease of 12 per year.

80%; net profit deducted from non-attributed mothers1.

8.3 billion, a decrease of 12 a year.

32%, performance in line with expectations.

At the same time, the company announced its 2019 performance forecast: expected net profit1.

42 to 2.

13 ppm, corresponding to a 10-year increase of 100% to 200%, which includes possible asset impairment provisions.

  In terms of single quarter breakdown, operating income in the third quarter of 20199.

40,000 yuan, an increase of 14 in ten years.

31%; net profit attributable to mother is 0.

610,000 yuan, converted to a fully diluted EPS of 0.

07 yuan, an annual increase of 0.

68%; net profit deducted from non-return to mother 0.

58 ppm, a ten-year increase4.


  Overall gross profit margin decreased by 3.

22 averages, during which the expense ratio decreased by 1.

The consolidated gross profit margin of the 1-3Q companies in 2004 was 37.

39%, a decrease of 3 per year.

22 units.

  Expenses for the company during the first three quarters of 201928.

83%, down by 1 every year.

04 single, of which the sales / management / financial expense ratio is 22 respectively.

54% / 2.

61% / 2.

09%, change -0 each year.

48 / -0.


27 units.

  Channel strategy adjustment brings new space for growth. In the environment where the overall growth of the industry is cold, 重庆耍耍网 the company adjusted its channel strategy to accelerate the advancement of joint ventures to achieve an increase in the expansion speed of the channel network and a deeper layout in lower-tier cities.

It is expected that the number of franchise channels of the company will continue to increase in the future, and the revenue of franchising agents will become an important part of the company’s overall revenue.

Although the increase in the proportion of franchise business may cause a certain drag on the company’s comprehensive gross profit margin, continuous and healthy growth in the income side will effectively enhance the company’s market competitiveness.  We have slightly lowered our 19-year profit forecast and maintained our 20-21 year profit forecast. Maintaining a “Buy” rating. Taking into account the company ‘s annual performance forecast, which may include provision for asset impairment, we slightly reduced our company ‘s 19-year EPS forecast to 0.

21 yuan (previously 0.

23 yuan), maintaining the forecast for 20-21 years 0.


26 yuan.

The company’s operating style is stable, the channel strategy adjustment opens up new space for future growth, and the company PB 1.

0X (2019E) is far below the average of the past three years (3.

12X), maintain “Buy” rating.

  Risk reminder: The layout of the fashion industry is not up to expectations, and the K gold jewelry market is not up to expectations.