Youngor returns to main apparel brand owners income will maintain growth

Youngor Group Co., Ltd. released its first quarterly report on April 26, reporting that Youngor’s net profit attributable to shareholders of listed companies for the first quarter of 2012 was 256 million yuan less than the same period of last year, mainly due to the financial investment segment of the current period. The income was -21.137 million yuan, a year-on-year decrease of 108.06% from the previous period of 2651.772 million yuan. After deducting non-recurring gains and losses, the basic earnings per share growth of 72.79% over the same period last year was mainly due to a net profit of RMB 264,532,200 for the period, representing a year-on-year increase of 25.94%, and a net profit of RMB 29,834,400 for the real estate segment, a year-on-year increase of 133.25. %.

Analyst Tan Kexin of Dongxing Securities pointed out that the business focus of Youngor Group Co., Ltd. has returned to the main business of branded clothing, and it is expected to maintain an average annual growth rate of more than 20%, of which 10% will come from the expansion of terminal quantity and 5% from R&D. The added value of the products designed for improvement was increased, with 5% from price increase and single store scale increase. The company's idea in real estate is relatively cautious, and it strives to maintain a smooth transition of the business in the context of macro-tightening. The contraction of financial investment business is in line with the company’s return to the dominant strategy of branded apparel, which is also conducive to stabilizing investor expectations and enhancing company valuation.

Youngor held a general meeting of shareholders and a special exchange of branded apparel on April 20. It communicated with shareholders and investors on the company's 2011 annual report business performance and future development strategy. The company once again clarified the development strategy of brand-based apparel as its main business. The real estate business is subject to macro-control, the 2012 target is to achieve a balance of cash flows, and the proportion of financial investment is gradually decreasing.

Analyst Zhang An of Guotai Junan Securities pointed out that judging from the apparel sector revenue, net profit contribution, and management attitude and determination of Youngor Group Co., Ltd. in the past three years, Guotai Junan Securities believes Youngor is returning to its main business. It is expected that Younger's main brand revenue will maintain a growth rate of 15%-20% in 2012; GY and HSM are the two subsidiary brands that the company focuses on, and it is expected that the 12-year revenue growth rate may reach 50%. At the same time, the company further spun off the low-margin export foundry business, and the gross profit margin of the apparel business is expected to increase further. And as of April 20, 2012, the company's real estate pre-sales are in good condition. It is expected that real estate sales will reach RMB 6 billion in 2012, and the cash flow status will also be greatly improved. The real estate business is constrained by the macro-environment, and the company is also actively carrying out adjustments on some product structures while maintaining stability, and appropriately reducing the proportion of high-end housing. The analysis pointed out that Youngor will gradually weaken its investment in the financial investment business, but it will not completely withdraw.

Youngor achieved sales revenue of 2.054 billion yuan in the first quarter, a year-on-year decrease of 9.56%, and net profit attributable to the parent company of 256 million yuan, a decrease of 34.27% year-on-year, equivalent to 0.12 yuan per share. The main reason for the decline in the first quarter's performance was the net profit of the investment sector in the first quarter was RMB 213.757 million, which was far lower than the RMB 265 million in the same period of last year.

Oriental Securities analyst Shi Hongmei analyzed that Youngor’s net profit in the apparel sector in the first quarter was 265 million yuan, a year-on-year increase of 25.94%. In November 2011, the company acquired a 25% stake in 14 companies including Ningbo Youngor Shirt Co., Ltd. (a core part of the branded apparel domestic sales business), which was included in the quarterly report. Due to the unified image renovation and renovation of the national store in 2011, some of the expenditures were confirmed in the first quarter of this year, resulting in a significant increase in the sales expense ratio in the first quarter. The growth rate of the operating profit of the apparel segment was lower than the growth rate of income; and the income tax rate and non-operating income The fluctuation further reduced the growth rate of the net profit of the consolidated statement. From a year-round perspective, Orient Securities expects that the contribution of domestic branded apparel to earnings per share is expected to reach 0.50 yuan, and the textile and business foundry business will be further reduced.

Orient Securities believes that the growth of Youngor's men's brand and its comparative advantage in men's clothing companies is not as slow as the growth rate of other men's fashion brands, and there is room for further growth. The multi-brand operation has accelerated, and the Hart Schaffner Marx and GY brands have been or will be profitable. In the future, they will enter the sales volume stage driven by the expansion of expansion.

The analysis also pointed out that Youngor's real estate segment realized a net profit of 29.84 million yuan in the first quarter, a year-on-year increase of 133.25%; and the advance receipts from the real estate sector in the first quarter increased by 819 million yuan from the end of 2011. Orient Securities has determined that the cash flow of the real estate business this year will be significantly improved and the funds will be self-balancing. The real estate sector is constrained by the macro environment, but with the arrival of the settlement peak, the lock-in performance of this year's full year is relatively strong.

At present, Youngor has begun to return to the men's apparel industry from the perspective of Youngor's clothing revenue, contribution ratio of operating profit and net profit contribution, and management’s re-establishment of the main position of branded apparel. With the promotion of the company's multi-brand operation strategy, the stable growth characteristics of the apparel industry will gradually appear. Focus on clothing main business Youngor will gradually strip off the low gross margin foundry business, focusing on the development of brand menswear. It is expected that the future YOUNGOR brand will maintain a 20% growth rate. Positioning high-end business and casual men's clothing, Hart Schaffner Marx, has achieved profitability in 2011 and is expected to achieve a 50% growth in channel and revenue this year. The GY brand positioning young fashion consumer groups will also enter the stage of rapid development. It is estimated that 40 new stores will be opened this year, and it is expected to realize an income of 120 million yuan, and the revenue growth rate is expected to reach 50% year-on-year. In addition, the company holds a large number of its own retail resources in prime locations. It is expected that in 2012, the company's expansion will expand by 10%, and the efficiency level is expected to increase from 18,000/square meter to 20,000/square meter.