What Are The Common Factors Behind The Mid Term Performance Of Service Enterprises?

The mid term results of garment enterprises are intensively disclosed. In the first half of the performance of some garment enterprises, while some of them are relatively weak, some garment enterprises have achieved relatively good performance in double-digit growth of net profit. Looking at the development of these enterprises in the first half of the year, we can find some common factors playing a role.

Lining half year net profit increased substantially, promoting diversification of channels

In August 14th, Lining released the interim results announcement in 2019. The company's revenue in the first half of 2019 reached 6 billion 255 million yuan, up 32.7% over the same period in 2018. Lining said that the reason for the sharp increase in revenue is that the channels have increased substantially. The franchisee's confidence in Lining brand has been enhanced. The group has transferred some of its original stores to distributors, and has agreed to set up big stores and fashion shops, so that the revenue of the franchisee has increased by 40%. By the influence of the transfer of some stores, the sales revenue has slightly slowed down, but there is still a growth rate of more than 10%. As well as the rapid development of the electricity supplier channel in recent years, the proportion of revenue has increased, showing a 30% high growth.

The interim report shows that the net profit of equity holders in the first half of the year was 795 million yuan, a 196% rise in the same period, and the net interest rate of the company increased from 5.7% to 12.7%. Lining said that the sales revenue and gross profit margin of the group both increased, the cost rate decreased, other income and other income increased, and the share of the investment profit that was accounted for by the equity method increased significantly, so the comprehensive profit index in the first half of this year has improved significantly. Lining said that in the first half of the year, the company continued to focus on products, channels and retail operations as well as supply chain management as the main business focus, and launched the strategy of "single brand, multi category and multi-channel", emphasizing the professional sports attributes of the product, integrating professional sports with the trend culture, and continuing to take the five major categories, including basketball, running, training, badminton and sports fashion as the core.

Lining said that the company promotes diversification of channels, focusing on shopping mall channels and outlets outlets on the basis of traditional commercial streets, department stores and sports cities. In the first half of this year, the company entered into strategic cooperation with several large chain commercial real estate groups in China, and set up multi category and efficient shops in shopping center channels. At the same time, we should close down the loss shops and upgrade inefficient shops. In addition, the company has also made breakthroughs in key provinces' regional markets and low-level markets. According to the performance report, as of June 30, 2019, the sales volume of Lining brand (including Lining core brand and Lining YOUNG) regular store, flagship store, Chinese Lining fashion shop, factory shop and multi brand collection store was 7294, up 157 from December 31, 2018, and 62 dealers (including China Lining fashion shop), a 16 increase compared with December 31, 2018.

China's semi annual performance has increased steadily, and more shopping centers have been opened.

In August 13th, China released the mid term performance report in 2019. In the first half of 2019, the company achieved an income of 1 billion 540 million yuan, an increase of 19.1% over the same period of last year, of which the "LILANZ" brand revenue grew by 20.3%, and the company owner should earn 389 million yuan, up 14% over the same period last year. Chinese Li said that the number of stores that had been operating for more than 18 months increased by a high number of units. At the same time, the size of new shops increased last year, which led to revenue growth. After deducting the impact of light business series, the sales growth is consistent with the order growth in spring, summer and autumn. By product category, tops are still the main source of income, accounting for 53.6% of revenue in the first half of the year, and sales increased by 22.5% over the first half of the year. LILANZ Over the past two years, sales of footwear products increased by R & D investment in the past two years continued the growth momentum of last year. Total orders in 2019 increased by more than 50%, and sales in the first half of the year increased by more than 3.

China said that the group continued to push distributors to open stores in the provincial capitals and prefecture level shopping malls. By the end of June 2019, the number of shopping malls has increased to more than 680, accounting for nearly 25% of the total number of stores. The group has 2753 retail outlets, a net increase of 83 over the end of last year, and the total store area increased by 3.7% over the end of last year. Among them, the independent business of light business series has reached 255, with an increase of 43 during the period. The group plans to launch the seventh generation store decoration image in the second half of the year.

China said that the group continued to promote the "LILANZ" main line and light business series by integrating online services, offline experience and improving logistics services with the focus of new retail development. The group will continue to expand the pace of market expansion in the second half of the year and maintain the target of increasing about 200 stores throughout the year. The group will continue to encourage distributors to increase shopping malls, and the main line will continue to open stores in the three or four line market.

In June 3rd, China announced that the total amount of orders in 2019 (at wholesale prices) rose by 10% to 13% in 2019, and the growth rate of orders was slower than expected. The main reason is that the average unit price of products in the winter has dropped slightly compared with last year due to the decrease in raw material costs, and the growth of retail trade in May has slowed down, and the confidence of distributors has been affected. The order volume of the winter ordering society recorded a healthy growth of 15% to 20%.

Positive fashion half year revenue, net profit and double growth, online channels become an important driving factor.

In August 15th, an Zheng fashion released its semi annual report in 2019. The company achieved operating income of 1 billion 124 million yuan in the first half of 2019, an increase of 49.49% over the same period last year, and a net profit of 192 million yuan attributable to shareholders of listed companies, an increase of 18.34% over the same period last year (after deducting the incentive cost of restricted stock). Net profit attributable to shareholders of listed companies after deducting non recurring gains and losses was 164 million yuan, an increase of 30.19% over the same period last year. According to the report, the increase in profits in the first half of the year was mainly due to the growth of main business and the rapid growth of ritual information business.

Semi annual report shows that in the first half of the year, the online sales of clothing business in the main business of Zheng fashion reached 162 million yuan, an increase of 40.91% over the same period last year. From 2014 to June 30, 2019, the apparel online sales accounted for 4.31%, 9.14%, 10.98%, 13.80%, 18.07% and 21.32% respectively, showing an upward trend. The company has increased investment in network sales, established micro mall, realized online and offline listing and sales of the same stock. At the same time, the company acquired Shanghai Li Shang Mdt InfoTech Ltd in October 2018, with the intention of strengthening online operation capacity. At present, Li Shang information operates more than 20 famous brands at home and abroad, achieving sales revenue of 364 million yuan in the first half, an increase of 21.33% over the same period last year. By the end of 6 2019, the company's online sales had reached 526 million, accounting for 46.96% of the company's revenue.

In line with the channel, the number of terminal entities stores is 939, a net decrease of 34 compared to the end of 2018. An Zheng fashion said earlier that after the maturity of the high-end line products, it will increase the layout of the mainstream business circle in the second tier cities, and the company will sink to the three or four tier cities after the product price is widened.

In addition, in the semi annual report, Ann fashion mentioned the high inventory problem. The company said that as of 2019 06, 30, the company's net stock was 838 million yuan, accounting for 34.81% of the total liquid assets. Among them, the inventory accounted for 75.28% of the total inventory, accounting for 76.05% of the inventory goods in the 2 years. Although the company's larger inventory is in line with the characteristics of the company's sales mode, the inventory is still at a relatively high level. If the market environment changes or the competition intensifies, it will lead to a decline in inventory prices or a difficulty in inventory realisation, and the profitability of the company will be adversely affected.

Baosheng international half year net profit growth of nearly 40%, that benefit from sports and leisure consumption trends

In August 13th, Baosheng International released the mid term performance report for 2019. The company's revenue in the first half of the year was 13 billion 372 million yuan, an increase of 19.4% over the same period last year. The company's owners should earn 427 million yuan, up 39.3% from the same period last year. Baosheng International said the growth was attributed to China's trend in sports and leisure activities and the participation rate of sports activities, the continuous development of group retail business and the rapid growth of online business.

According to the performance report, as of the end of June 2019, the group had 5895 direct retail outlets and 3756 franchise stores. Baosheng International said that the rise in consumer spending coupled with the accelerated development of sports and leisure trends, such as the increasing attention paid by the Chinese people to fitness and health, the increase in the participation rate of sports activities, the increase in the number of sports service orders, and the support of government policies, made the group optimistic about the demand for sports apparel and sports services in China to continue to grow substantially. In order to seize the opportunities brought about by this trend of leisure and sports, the group will continue to focus on opening and upgrading physical stores that offer rich experience and upgrading online channels, while planning to open a new large shop that can better integrate store sports services and network elements with online products and other sales channels.

Baosheng International said that the group will continue to develop e-commerce platforms and business intelligence systems. The future group expects to integrate all sales outlets, acquired experience or products into small distribution centers, providing support for its channel and logistics strategy. The group will continue to integrate and upgrade its full channel sales and distribution network, CRM applications (such as loyalty scheme and membership participation) and operation system to support the implementation of sports services and events in Greater China.

In June 27th, Baosheng International announced that it would sell sporting goods products through vip.com, including the sporting goods, clothing, footwear and accessories products authorized by the Baosheng international brand, including but not limited to Nike, Adidas, PUMA, Converse and other brand products. Baosheng International said vip.com is one of the largest online retail sales platforms in China. By setting up a joint venture (i.e. Bawei) and setting up a framework agreement with vip.com group, it can use the comparative advantage of online and offline vip.com and vip.com to create synergy for both sides.

Hua Shang observation: diversification of channels becomes an important factor for garment enterprises to support their achievements.

Clothing companies semi annual report is still being released, there will be more clothing enterprises to release good or exceed the "expected" performance report. However, from the first half of the past few years, both the revenue and net profit achieved double-digit growth of garment enterprises, it can still reflect the operation of some parts of the garment industry in the first half of the year and some of the development of the garment enterprises.

First of all, at the end of the development cycle of the macro-economy and the pressure of external market operation, the development trend of garment enterprises is further differentiated, and the number of "accidents" increases. For example, some garment enterprises failed to continue their performance recovery and growth last year, and recorded losses or even huge losses in the first half of the year. Some enterprises were going to withdraw from the market. Some enterprises "sold their shells", but at the same time, some enterprises in the first half of the year increased substantially compared with the beginning of the year, and their market value even hit a new high in recent years, and their performance also increased significantly. From this situation, we can see that the basic factors that support the performance growth of garment enterprises still exist.

Secondly, from the industrial point of view, the development cycle factors of subdivision industry are also playing a role. Judging from the first quarter performance of garment enterprises, sportswear, adult clothing, especially high-end high-end clothing enterprises have relatively good development trend. The above four garment enterprises are derived from these industries, while some of the public leisure apparel enterprises' performance is "Thunderstorm". Although it is impossible to generalize, a good performance garment enterprise has a relatively large probability of subdividing the industry from the running situation.

Thirdly, the development of enterprises themselves. Although these garment enterprises belong to men's wear, women's wear and sportswear, they also have some similarities in their operation. For example, in the channel operation, there are more shopping center stores, and the proportion of large stores is increased. At the same time, we pay more attention to the opening of outlets such as outlets. Clothing companies also increase the visibility of the channel construction, and do more exploration in the new retail business such as social business. Generally speaking, diversification of channels is a common trend in the development of garment enterprises. While diversifying, clothing enterprises also have many actions in adjusting the channel structure and improving the quality of channel terminals, and adopting more integration and adjustment strategies, not just blind expansion, but also strive to ensure the quality of development of channels so as not to fall into the "trap" of scale expansion.