Semir Apparel: Stable Performance Decline

Semir clothing (002563.SZ), as a listed company, is a profitable company, but it is hard to make money by buying shares of the company. Opening all the K-line charts that have been listed since 2011, seven years later, the price is still on the cutting edge of the listing day.

Moreover, the three quarterly report of Semir apparel announced that the net profit in 2017 is expected to grow by -30%-0%.

So, "buying stocks is buying companies" is not true.

The performance is fairly stable.

From 2011 to 2016, the net profit of Semir clothing owners belonging to the parent company over the years was 1 billion 223 million yuan, 761 million yuan, 902 million yuan, 1 billion 92 million yuan, 1 billion 349 million yuan and 1 billion 427 million yuan respectively.

In 2012, it suddenly slipped, and after a hard climb, it finally began to pick up in 2015. It saw a slight increase in 2016. Now it suddenly loses a -30% for 2017.

In 2012, the annual profit margin plummeted. The annual report explained that "mainly due to factors such as competition in the industry, rising channel costs, increased inventory ratio and other factors, resulted in a 18% decrease in franchise revenue."

Compared with the industry supremacy of the United States (002269, 002269.SZ), net profit from 1 billion 206 million yuan in 2011 to 850 million yuan in 2012, we know that diving is not the Semir thing.

In contrast to the data in the last few years, Semir clothing has gradually climbed, and the American state clothing that does not take the unusual road is still on the bottom of the valley.

Therefore, objectively speaking,

The absolute value of net profit is also very good in A shares.

Look at the quarterly revenue of the past five years (see chart 1).

Blue is the actual amount, and orange is the predicted amount based on the index method. Figure 1 shows that Semir's clothing has a strong revenue stability. The fitting value is overlapped with the actual value. This is very rare. According to this fitting, the company's fourth quarter business volume will reach 4 billion 70 million yuan, an increase of 15% over the same period, and the annual revenue growth will reach 13%.

By comparing the real data of the year and the previous quarter, we can see that the company has increased by quarter compared with the same period last year, and has never dropped in the first quarter of 2014.

From the comparison of core profit quarterly index, the core profit quarterly fitting degree is quite high, but in the fourth quarter of 2016 there was obvious disharmony (see chart 2).

When the three quarterly report maintained 1% growth in 2017, the company forecast -30%-0% for the whole year, so the blue spot in the fourth quarter would be much lower than the orange forecast point.

The reason for the company's decline in the annual performance forecast in the three quarterly report is that the increase in R & D investment, the increase of personnel salaries and the increase in the cost of electricity business development resulted in a larger increase in fees this year. Since the past six months, the company has increased its support for franchisees and increased the corresponding increase in assets impairment losses.

It seems that the fourth quarter may have an astonishing figure in the cost of sales or asset impairment.

Sales fees will increase substantially.

Using the same forecast method of sales cost (see Figure 3), the cost of the fourth quarter of 2016 can explain the abnormal value of the core profit season.

Compared with the very high degree of fit of operating income and core profit, the fitting degree of sales cost is very poor, and the selling cost gradually runs to the top of the forecast value (Orange). The quarterly index method is the fitting of linear growth, and the selling cost goes from top to bottom, which indicates that the growth of the selling cost is not linear, and has no linear relationship with the growth of the turnover. So how much does the marketing cost increase in the fourth quarter?

A comparison of the quarterly operating income ratios of sales costs shows that in the third quarter, compared with the previous year, the highest level in the first, second quarter soared in 2017.

The company's explanation for the increase in marketing costs is: "this year, R & D investment and staff salaries are increased.

Development leads to larger costs.

The author has counted the proportion of main items in half year report, the proportion of wages is 20%, the service fee is 24%, the rental fee is 15%, the advertising expenses account for 15%, the pportation expenses ratio is 13%, and the social insurance premium accounts for 7%.

These projects account for 94% of the total.

To sum up, a substantial increase in sales costs should be a big probability event.

Operational efficiency is decreasing.

Data show that in 2013 -2015, the impairment of assets of Semir clothing was the third quarter gross impairment, and in 2016 and 2017, it seems to be the fourth quarter gross impairment.

The accrued ratio in the table is the ratio of the reserve price at the end of the current period to the book balance of the stock. The ratio increased from 0.09 in 2011 to 0.27 in 2014, and then dropped to 0.15 in 2016. The more reasonable explanation is: either the listed company has reduced the amount of provision or increased the stock of new goods.

The good thing is that since 2015, dead goods and goods are decreasing.

However, the proportion of inventory accounts for the current turnover is steadily increasing year by year. We can see that operational efficiency is decreasing. This trend is the most worrying thing for clothing enterprises.

The proportion of loss loss to sales is basically between 3%-4%, which is equivalent to 100 clothes per sale, and the final 3-4 items can not be sold. Do you think this is not bad?

The annual downturn is not that serious.

According to the upper and lower limit of the company's annual performance, we can make a simple calculation.

According to the very high fitting income, the fourth quarter forecast value is 4 billion 70 million yuan, conservative 5% off calculated income, about 3 billion 867 million yuan.

Based on the zero growth in the forecast, with the highest proportion of income tax and management expenses, assuming that the assets impairment is zero, the upper limit of marketing expenses in the fourth quarter is calculated to be 561 million yuan, which will exceed the highest level in history. The 477 million quarter of the fourth quarter of 2016 is about 90 million yuan.

According to the marketing cost, the upper limit of assets impairment calculated by the company's lowest performance forecast -30% will be 427 million yuan, exceeding the highest level in history, and about 180 million yuan in the third quarter of 2013, about 140%.

Then, according to the assets impairment calculated by different incomes, the highest proportion of history and the proportion of the same period last year, the magnitude of the decline in performance is finally estimated.

The decline in annual performance will not exceed 10%.

Why do companies make forecasts for -30%? They may need to lower their share prices, or have huge asset impairment preparations, or do they publish final answers.

Children's wear

Although the name of Semir clothing is called Semir, it actually operates two brands with relatively large difference: Semir (

And Barbara (children's clothes).

Semir's turnover and gross profit margin were double killed, but the gross profit margin in the first half of 2017 was the highest in history.

But look at Barbara's gross profit, but sesame flowering is high, you know, in other cases, the gross profit growth is pure profit.

In terms of casual wear, Semir's revenue has declined since 2011, and has fallen for three consecutive years, rising from 2014, and just returning to 2011 level in 2016.

But Barbara's contribution to its revenue has maintained a growth rate of about 25%. In the first half of 2017, Barbara broke through Semir in a bid to succeed in counterattack. This is an epoch-making turning point in the listed company. From then on, Semir will become the name of the company that is not worthy of the name.

Boldly guess that if Barbara could split the market separately, the market value could easily surpass Semir's current market value, that is, it would have a market value of 20 billion yuan.

Another Barbara market value of more than 20 billion yuan.

However, this move is too slow, which is most beneficial to Semir holding family, but small investors who hold Semir stocks may still not be able to get profits.