March 15

Boss Electric (002508): Q3 results exceed expectations Next year’s offline retail turning point can be expected

Boss Electric (002508): Q3 results exceed expectations Next year’s offline retail turning point can be expected
Event: The company released three quarterly reports and achieved revenue of 56 in the first three quarters of 2019.25 ppm, a ten-year increase4.29%; net profit attributable to mother 10.86 ppm, a ten-year increase of 7.31%.  Comments: Engineering channel revenue growth accelerated, Q3 performance exceeded expectations The company achieved revenue of 56 in the first three quarters of 2019.25 ppm, a ten-year increase4.29%, net profit attributable to mother 10.86 ppm, a ten-year increase of 7.31%, net profit after deduction is 10.3.3 billion, an increase of 11 in ten years.36%.In terms of quarters, the revenue in the third quarter increased by 11% per year, net profit attributable to mothers increased by 18%, net profit attributable to mothers after deductions increased by 22%, and the profit-side growth rate exceeded expectations.At the same time, the company expects that the net profit attributable to mothers will increase by 2% in 2019?10%.In terms of different channels, the revenue of engineering channels increased by more than 100% in the first three quarters. At the same time, according to Zhongyikang statistics, the company’s offline retail channels in the third quarter had narrowed.In terms of profit, the company’s gross profit margin increased by 1 in the first three quarters, benefiting from the decline in raw material costs, tax and fee reductions, and brand pull.8 points.  Increasing market expenses + controlling the pace of offline transfer, the retail channel will usher in the company’s Q3 sales expense ratio of 27.68%, basically unchanged from the same period last year.Taking into account the high growth of the Q3 engineering channel and its channel characteristics with a low sales expense ratio, we believe that under the overall situation of the retail channel, the company proactively increased market expenses for the retail channel and guided agents to optimize the operation of existing stores.At the same time, actively sink channels to promote the concentration of third- and fourth-tier brands.In the meantime, the company has been controlling the pace of control from the beginning to the present in order to match the inventory structure adjustment of offline retail channels.  Combined with the change in the company’s inventory over the same period, we predict that the company’s offline inventory adjustment is nearing its end. Next year, the retail channel in Q1 will most likely usher in an inflection point.  Occupation of upstream funds + faster inventory turnover, Q3 operating cash flow improved significantly in the first three quarters, the company’s bills payable and accounts payable increased by 61%, and inventory reduction decreased by 6.2%, the change from the previous month is more obvious.By occupying upstream supplier funds and accelerating inventory turnover, the company has reduced the impact of the slow return of engineering channels on operating cash flow. In the end, Q3’s net operating cash inflow improved significantly from the previous quarter.We believe that this move will strengthen investor confidence in the company’s ability to create future cash.  Earnings forecasts and investment recommendations are based on the company ‘s third-quarter performance that exceeded expectations, and slightly increase the company ‘s next three-year results.  The company is expected to achieve net profit in 2019-2021.9 billion, 17.73 ppm and 19.8.5 billion, corresponding to the current PE is 17 times, 15 times and 14 times.The distribution of engineering channels has entered the harvest period, which has 北京夜网 continued to drive revenue growth. The offline retail channel inventory has been accelerated to digest, and the continuous completion of overlapping completions has continued to change. The company’s operating performance has gradually changed to an upward inflection point, maintaining a “strong recommendation” rating.  Risk warning: Rising sales expense ratio, rising raw material costs



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Posted 03/15/2020 by admin in category "夜网