Sofia (002572): Revenue growth fulfills expected channel optimization and fulfillment

Sofia (002572): Revenue growth fulfills expected channel optimization and fulfillment
A brief review of performance In the first three quarters of 2019, the company achieved revenue / net profit attributable to its parent 53 respectively.12 ppm / 7.200 million, an increase of 4 each year.03% / 4.05%, fully diluted EPS0.79 yuan, lower than expected. Operating analysis Q3 revenue and performance growth was significantly higher than expected, but cash flow in the single quarter improved.In the third quarter, the company’s revenue and net profit attributable to mothers increased by only 2 respectively.42% and 1.87%, with a ten-year average of 17.68pct and 12.83 points.The lowest income for a custom wardrobe is 1.71%, leading to the company’s revenue growth potential.In the first three quarters, the company’s accounts receivable was 5.48 ppm, an increase of 27 in ten years.96%, a growth rate of 109 lower than the same period last year.61 points; inventory level 3.460,000 yuan, ten-year average of 0.78%.Benefiting from this, the company’s operating cash flow increases every year.75% (average 39 in the same period last year.75%).Among them, Q3 operating cash flow reached 3.75 ppm, more than doubled in a year, the company’s cash flow is gradually improving. In the first three quarters of the closet, the revenue of the wardrobe increased slightly, and the terminal gained pressure resistance.In the first three quarters, the company’s custom wardrobe revenue was 42.93 trillion, basically the same as the same period last year, only slightly increased by 0.75%.From the perspective of split channels, retail revenue from January to September was 38.22 ‰, an average of ten years.46%, revenue from bulk channels4.71 ppm, an increase of 23 in ten years.21%, the main business proportion 南宁桑拿 increased by 2pct every year.The company’s closet business terminal is under pressure from passenger flow, with about 33 customers in the first three quarters.850,000 households, an average of 6 in ten years.25%.The percentage of Beyond Kang pure board increased to 20%, and the launch of light luxury series products, the company’s customer unit price increased by 5.1% reached 11,291 yuan / order (factory caliber).The company is in a period of channel operation adjustment this year. In the first three quarters, 77 new areas were developed, and 62 dealers and areas were eliminated. Subsequently, it accelerated the sampling of new products, upgraded the image of terminal stores, and dated high-potential, high-growth dealers. The cabinet and wooden door business reduced losses for the first half of the year.1) Cabinets: The company launched 9 sets of new cabinets in the first half of this year, and successfully reversed the sales of most terminals from low-price packages to profitable products, improving Smy’s cabinet products and brand positioning.Cabinet revenue in the first three quarters was 5.50,000 yuan, an increase of 12 in ten years.14%, gross margin reached 28.35%, increase by 1 every year.01pct, the net profit side has greatly reduced losses by 97.83%; 2) Wooden doors: The company continues to promote the integration of wooden door products in Sofia stores to ensure the unified design and tonality of cabinets and wooden doors, and to achieve the linkage between the two products.In the first half of the year, wooden door revenue increased by 24.47%, gross margin increased by 3.81pct reached 13.96%. Profit forecast and investment advice At present, the industry is fiercely competitive, the company’s retail terminal has gained pressure from customers, and the logic of rising volume and price in the short term has been damaged.We lower the company’s EPS for 2019-2021.09/1.16/1.26 yuan (previous average 1).17/1.40/1.66 yuan, a change of 6.7% / 17.17% / 24.38%), corresponding to a PE of 18/17/15 times, maintaining the “Buy” rating. Risk factors Risk of changes in the real estate market; market competition intensifies risks; risks of untimely digestion of new production capacity; risks of product price reductions affecting profitability.