How Far Can The Seven Wolves, Which Rely On Investment Profits, Go In The Future

On August 20, seven wolves (002029. SZ) released a report for the half year of 2020, saying that in the first half of the year, the revenue was 1.354 billion yuan, down 12.93%; the net profit was 24.4221 million yuan, a year-on-year decrease of 80.36%; the non net loss was 475400 yuan, a year-on-year decrease of 100.70%.

Seven wolf said that the decline in performance is mainly due to the public health and safety incidents, some offline shops can not open, the sharp drop in passenger flow.

In terms of products, in the first half of the year, except for the revenue of software products and services increased by 8.21%, the other eight categories of clothing products and other businesses declined to varying degrees. Among them, the sales of suits, jackets and outerwear products were greatly affected, with revenue down by 33.74%, 25.29% and 21.50% respectively. The biggest decline in the income of Western-style clothing was mainly due to the impact of public health and safety events, and the income of this category of clothing decreased significantly.

In terms of regions, the northwest region was the most affected, with a year-on-year decline of 54.80%, mainly due to the decrease of customer orders and the decrease of group purchase business. However, in East China, which accounted for 57.6% of the total revenue, the revenue decreased by 15.79% year on year.

In addition, the proportion of assets impairment in the total profit of septenaeus was - 356.90%, and the impairment of assets was 74.7418 million yuan, which was mainly due to the "provision of inventory falling price". Data show that in the first half of the year, the inventory of seven wolves was 952 million yuan, accounting for 10.26% of the total assets.

It is worth noting that the investment income of seven wolves in the first half of the year was 15.9247 million yuan, accounting for 76.04% of the total profit. The main reason is the investment income of financial products.

In fact, since 2017, seven wolf's performance has been in a state of decline, shop closures continue. Clothes are not easy to sell, and the seven wolves are increasingly dependent on investment income.

According to the data, the investment income of seven wolves in 2017 was 104 million yuan, accounting for 26.31% of the total profit; in 2018, the investment income was 154 million yuan, accounting for 44.50% of the total profit; in 2019, the investment income reached 111 million yuan, accounting for 25.72% of the total profit. It can be seen that the investment income has accounted for more than 20% of the profit of seven wolves for consecutive years.

As for the sustainability of investment income, seven wolf said in the semi annual report that with the decrease of financial management funds, the decline of yield, and the disposal of stocks held, the corresponding investment income may change.

How far can the seven wolves, whose main business is poor and relies on investment profits, go forward in the future?