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Oriental Securities: Chinese down jacket faucet takes off again

2019-06-12 来源：东方证券浏览量：3053

Oriental Securities released its Research Report on Bosten on June 6, which is summarized as follows:

Core Views

Bosten is the longest leading down apparel company in China. The company successfully listed in Hong Kong in 2007. Its revenue reached a historical peak of 9.33 billion yuan in FY in 2013. However, due to the extensive expansion of stores and diversification of business, FY's revenue and profit began to decline in 2014. In recent years, through upgrading and adjusting strategies, channels, brands and supply chains, the company's performance and stock prices have rebounded sharply since 2018, and achieved a second leap.

We believe that the company's brand accumulation in the field of down wear over the years, the global upgrade of down wear consumption and the firm and effective reform of the main business in recent years are the core elements of the company's re-emergence from 2018. At the strategic level, the company has clearly put forward the overall strategy of "focusing on the main channel, focusing on the main brand, shrinking diversification", focusing on the core main business of down clothing; on the channel, closing a large number of inefficient terminal stores, launching direct monopoly stores and business; on the brand side, the company seizes the trend of down clothing fashion and improves its products. In the aspect of supply chain, the company's long-term investment in fast response, logistics, order management and information construction has greatly improved its operational efficiency and response speed.

Through the excavation and study of the company's financial indicators, we find that some of the company's leading indicators have shown signs of improvement since FY2015 at the beginning of the reform. (1) Operating efficiency: Driven by the days of inventory turnover, cash turnover cycle declines rapidly. (2) Profit quality: Cash flow/net profit of operating activities remain at a good level. (3) Profitability: During the period, the cost rate steadily declined and the profitability improved.

We believe that the company's future performance still has considerable room for growth, mainly driven by three aspects: (1) the domestic down jacket market competition pattern is better, the rise of domestic goods and consumer upgrading to help the leading growth. China's down jacket market will grow rapidly in the future, the company is in an absolute leading position, the pattern is better, in addition, the rise of domestic goods and consumer upgrading will promote the company's market share. (2) After the successful upgrading of the company's main brand, there is still room for price increase and profitability improvement. At the same time, the sub-brand benefits from the upgrading of the main brand, and has a greater potential for scale expansion in the light of its own history and comparable peers in the future. (3) On-line beneficiary head traffic concentration and the advantages of standard products are expected to maintain rapid growth in the short and medium term, and offline channels also have extension and structural optimization space.

Source: Oriental Securities

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