31% Net Profit Fell 30% Is The Pformation Pains Or Wrong Direction?

The 361 year old, aged 36, is not at ease with the stability of middle age. He is trying to label himself young and enhance his brand image. He not only makes efforts to sponsor events, but also aims at the competition industry.

However, this report card in 2018 is not good looking.

As the national sports brand, Lining has successfully entered the fashion field and moved towards the tide brand.

Anta's revenue rose 44.4% in 2018, and its gross margin turned 50%.

The pace of 361 degrees seemed a bit flurried.

In 2018, the 361 degree performance was "planted".

The annual report shows that the 361 degree revenue is 5 billion 190 million yuan, a slight increase over the previous year's 5 billion 160 million yuan, but the net profit to the mother is only 303 million yuan, down 33.5% from the same period last year.

At the same time, gross margins, operating profit margins and earnings per share have suffered a sharp decline.

In 2018, the 361 degree group implemented a new logistics management plan, and the delivery schedule changed accordingly.

The company also pushed the brand remodeling, greatly increased advertising and publicity expenses, but little effect.

Is this a painful labor in the pformation of national enterprises, or is it a directional mistake caused by the unclear self cognition of enterprises?

01, increase the intensity of marketing!

At the 2018 Asian Games in Jakarta, Sun Yang, the spokesman for 361 degree, did not follow the cooperation terms of Anta and the Chinese national team. He chose to wear the Anta sportswear on the stage to receive the award. Instead, he chose her own endorsement of 361 degrees to make the town full of wind and rain.

The incident also made the 361 degree hot search.

Trying to get back to the national perspective and get rid of the 361 degree of the local flavor and temperament has been making great efforts in marketing in recent years.

Data show that in 2017, advertising revenue accounted for 9.8% of revenue and 11.4% in 2016.

This is related to the marketing of major events, and became the official two level sponsor of the Olympic Games in 2016 at 361 degrees.

The annual report revealed that the advertising expenditure of 361 degrees in 2018 was 557 million yuan, accounting for 10.7% of the group's total revenue.

In the 2018 interim report, the advertising and publicity expenses of 361 degrees were 1% higher than that of last year, reaching 260 million yuan.

This means that large advertising expenses come from the second half of the year.

In August 2018, the Jakarta Asian Games was held. The 361 degree is official partner.

At the same time, it is also a sponsor of the Chinese swimming team, and even signed the world champion Sun Yang individually.

The 361 degree cooperation with spokesperson Sun Yang began in 2011, during which Sun Yang and 361 degrees of business value rose.

Tasted the sweetness of 361 degrees to start expanding new partners, and took a look at the competition industry.

In March 2018, 361 degrees began to cooperate with the QGhappy of the competition team, and a competitor of the team was sent to Jakarta as a torchbearer.

Subsequently, the company stepped up its marketing efforts, turned its attention to the trend market, and signed a new spokesperson Tan Weiwei in October 2018.

By the end of 2018, there were as many as 14 brand spokesmen of 361 degrees, and it was evident in the sports market and entertainment circle that they were moving towards the high-end market.

However, whether the move is precise or not remains to be seen. After all, 361 degrees does not seem to have made substantial innovations on the products like Lining and Anta to cater to the consumption habits of fashion groups.

It may be far from enough to rely solely on the voice of the spokesperson.

At the end of 2018, 361 degrees seemed to have realized this point, and together with many avant garde artists created a brand new M1 RO series.

In the annual report, this product "brings the brand experience of consumers different from the past".

In the Tmall flagship store, the price of this pair of running shoes is the highest, which is 899 yuan, while the monthly sales volume is 54 pairs.

In comparison, the price of 119 yuan men's running shoes and women's running shoes priced at 189 yuan are 10 thousand or more.

Obviously, the new "temperament experience" 361 degree customer groups are not buying.

Although 361 degrees vigorously promote the "brand remodeling plan", we want to expand the high-end customers on the basis of grasping the sinking market.

Generally speaking, it is not easy to reverse the brand impression of consumers in the short term.

Previously, the 361 degree excavation of the sinking market has achieved initial success.

Since the opening of the two child policy, the children's wear market is booming, and 361 degrees seize the opportunity to take the lead in the middle and low price market. The average sales price of children's clothing in 2018 is only 67.9 yuan.

In 2018, the wholesale price of adult footwear dropped from 108.1 yuan to 97.9 yuan, and the price of clothing dropped from 76.7 yuan to 71.3 yuan.

The sale prices of these two kinds of flagship products are sliding against the "brand remodeling plan" advocated by the group.

Visible, 361 degrees before the main audience market in three cities and below.

02, 361 degrees slow, e-commerce business drag?

The 361 degree weakness in the electronic business platform is well known.

Constantly reducing the number of stores, the channel of electric business can not keep up with the speed, making 361 degrees further into a disadvantage.

From 2014 to 2018 five, the revenue and net profit of 361 degrees seem to be stable all the time, but on the business side, this veteran sporting goods manufacturer has been cutting the number of stores.

From 6357 in 2016 to 5539 in 2018.

In 2018, the 361 degree investment in e-commerce platform increased significantly.

The annual report shows that the Commission and other services fees paid by the company to the electronic business platform are as high as 120 million yuan, up 40% from 8590 last year.

The expenditure on other e-commerce increased from 48 million 200 thousand yuan last year to 57 million 800 thousand yuan.

361 degrees in the annual report that the group in late April 2018 with a well-known e-commerce platform to cooperate, the implementation of a new logistics management optimization program.

From time to time, the company mentioned the project is likely to be "Tmall wisdom store".

Public information shows that in the first half of 2018, 361 degrees worked with the project and extended to more than 3000 stores nationwide.

361 degree said, this cooperation will greatly shorten the time when distributors order orders to retailers, retailers can quickly respond to market demand, but also help the group better manage the inventory level of sales channels.

This is not a bad thing for 361 degrees.

But the move did not seem to help 361 degrees.

In 2018, the number of days of inventory turnover was 110 days, reaching the highest time in the past 5 years.

On the other side, doubts about the 361 degree "brush list" are also coming.

In 2018, double eleven, many consumers complained that 361 degrees were out of stock, unable to deliver goods and other reasons, requiring consumers to refund the order, customer service, "out of stock" products are not on the shelf.

Such behavior drew the public's speculation about the 361 degree "brush list".

When the incident happened, the 361 degree group did not respond positively to the scrubbing behavior. Whether the "brush list" or not was temporarily ignored, but the problem of poor management of the electronic business platform has been exposed.

361 degree has admitted that it is relatively slow in the electricity supplier, but the company's business strategy is quite robust: "may be slower, but did not make mistakes."

But in the era of e-commerce, it may be the biggest mistake.

When the competitors of the industry have taken a firm foothold in the electronic business platform, the 361 degree will go further and the cost will be very high.

2018 361 degrees in the electricity platform force means sales costs rise.

In 2018, the annual growth rate of group sales cost was 2.7%, reaching 3 billion 81 million yuan.

The company said the increase in the cost of outsourced footwear and clothing was due to the rebound in overseas sales in the second half of the year and the expansion of e-commerce business.

The consequent decrease in gross margin was 1.2 percentage points.

The company explained that this is also due to the explosive growth of the electricity business and the "brand remolding plan" mentioned above, leading to the dilution of core brand profits.

So far, in 2018, 361 degrees from inside to outside company restructuring plan, not only achieved little effect, and even became the "culprit" of the company's poor performance.

03, performance recovery or need 2 years, share price you go slowly

External factors also have a profound impact on 361 degrees.

The company reported that a major factor in the decline in its performance came from trade wars.

Exports are reduced, factory production is reduced and workers' salaries are impaired, all of which work on low income groups targeted at 361 degrees, thus affecting the 361 degree retail market as a whole.

Not only 361 degrees in the annual report for the analysis of the larger environment is relatively pessimistic, the same as Hong Kong stock listed companies Anta sports, also think the industry status for the company is full of challenges.

The road of 361 degrees in the future may be even more dangerous.

No pformation may slow down, and pformation may not work well. The cost of 361 degrees is enormous.

At the end of 2017, the company's operating cash flow reached 830 million yuan.

By the end of 2018, the company's operating cash flow dropped to 290 million yuan, and accounts receivable increased by more than three times. The situation is not optimistic.

As early as the annual report was released, the international rating agency Standard & Poor's forecast the performance of 361 degrees: in the next 12 months, the 361 degree revenue growth will slow down to 0-4%, lower than the 7-9% market growth, and the market share will also be further lost.

But at the same time, S & P has room for 361 degree of follow-up development: the company may recover in 2020.

Based on the estimate of the 361 degree performance, S & P decided to reduce the credit rating to "BB" level, and adjust the outlook from "stable" to "negative".

At the same time, 361 degrees will be included in the negative observation list and Fitch.

The rating agency claims that it needs to assess whether the brand redevelopment plan launched by the company in the second half of 2018 will effectively support revenue growth in 2019 and in the future.

Even if the 361 degree brand strategy works, it will take time for the company's performance to recover, but can the capital market provide enough patience for 361 degrees? Since March 2018, the 361 degree share price has gone down from 2.7 Hong Kong dollars / share to the current 1.52 Hong Kong dollars / share, and the market value has shrunk by more than half.

On the day of 361 degree earnings warning, shares jumped 12.07% at once.

At the same time, 361 degrees indicated that the company's board of directors still maintained a positive attitude towards the long-term outlook of the group.

The State Sports Administration has predicted that by 2020, the total scale of China's sports industry will exceed 3 trillion yuan.

But in the 3 trillion yuan, it is still unknown whether the brand pformation and the electricity supplier channel can be divided into a relatively large cake by 361 degrees.