The Adjustment Of AOKANG's Income Will Continue.

The company achieved revenue of 1 billion 451 million yuan in the first half of 14 years, down 2.8% from the same period last year, and the net profit to the parent company was 158 million yuan, down 25.7% from the same period last year, EPS0.39 yuan.

Affected by the slowdown in industry growth and the overall downturn in the retail sector, the revenue side of the company continued to bear pressure in the first half of the year, but the decline has narrowed down. Due to the promotion of sandals and inventory digestion, gross margin fell 3.68 percentage points over the first half of the year, dragging down the first half performance, resulting in a net profit drop larger than revenue and a 0.91 percentage point decrease in the period cost rate.

Among them, the Q2 income increased by 8% over the same period last year, the first year-on-year increase after 13 years of Q1, net profit decreased by 33.4%, inventory 840 million yuan, and the ratio increased slightly by 24 million yuan.

Income inflection point is established, the performance pressure will ease in the second half of the year.

Affected by the downturn in the market environment, the expansion of the channel in the first half of the year has slowed down, mainly by expanding and changing the structure of the store to optimize and adjust the proportion of big stores (International / famous).

From the first half of the year, the revenue of international pavilions grew well, and the advantages of similar stores were outstanding. It is expected that with the acceleration of the pace of opening stores in the second half of this year, the contribution to the company's revenue will also gradually increase. At the same time, in the second half of last year, under the background of low base, it is expected that the income in the second half of this year will continue to improve and the income inflection point has been established.

In addition, as sales promotion and inventory digestion are not long-term, it is estimated that gross profit margins will gradually return to normal level in the second half of the year, especially in the Q4. With the end of the direct operation, the cost is expected to improve gradually in the second half of the year, and the overall performance pressure will be eased.

The advantage of men's shoes is further consolidated, and the medium and long term benefits from changes in the industry pattern.

At present, most shoe companies are still in the stage of deleveraging at the bottom of the industry. The company constantly improves its management capability through its own adjustment, especially in the International Pavilion. The strength of the men's shoes market has been further consolidated.

In the medium to long term, the company is expected to benefit from the upgrading of the industry's low trough and the change of competition pattern. With its own efforts in channels and brands, the market share is expected to gradually improve.

Risk warning

Terminal retail environment continues to slump; international stores are not as fast as expected.

Maintain the "prudent recommendation" rating.

At present, the industry has not yet been significantly improved. The company will further consolidate its market competitive advantage by developing the international / famous brand store strategy and improving its management efficiency, which is expected to benefit from the overall industry concentration in the medium to long term.

At present, the turning point of company revenue has been established. Considering the lower base of the same period last year, it is expected that the overall performance pressure in the second half of this year is expected to ease.

Maintain a profit forecast of EPS0.62/0.72/0.85 yuan for 14-16 years, equivalent to PE24.0/20.6/17.5 times, and maintain the "prudent recommendation" rating.