Baby-friendly room (603214): The growth rate of single-quarter revenue has picked up substantially.

Baby-friendly room (603214): The growth rate of single-quarter revenue has picked up substantially.

Brief description of results: 2019H1, baby-loving room realized revenue11.

$ 7.9 billion / +15.

92%, net profit attributable to mother is 62.29 million yuan / + 27.

31%, deducted non-net profit of 50.89 million yuan / + 25.

68%, net operating cash flow -50 million / -100.

58%, basic EPS 0.

62 / + 10.


Among them, non-recurring items mainly came from 1119 million government subsidies and 6.4 million wealth management product income.

2019Q2 single season: achieve revenue 6.

3.4 billion / + 18.

36%, the net profit attributable to the mother is 44.52 million yuan / + 21%, non-net profit attributable to the mother is 36.41 million yuan / + 25


The growth rate in the single quarter of 2019Q2 has rebounded sharply, and store sales have maintained rapid growth.

2019H1 achieved operating income11.

$ 7.9 billion / +15.

92%, the single quarter of 2019Q2 achieved revenue 6.

3.4 billion / + 18.

36%, revenue growth rate rebounded significantly.

Among them, the store sales income was 10.

47 ppm / + 17.

23%, a total of 88.

82%; e-commerce sales 31.66 million yuan / + 87.

11%, accounting for 2%.


The gross profit margin has been continuously optimized, and the increase in the gross profit margin of milk powder has been outstanding.

2019H1 gross margin increased by 1.

46pct to 28.

87%, the gross profit margin of the single quarter in the second quarter as a whole increased by 1.

49 points to 30.

95%, continuous optimization.

Among them, in 2019H1, the gross profit rate of milk powder increased 3.

27 points, mainly due to the continued increase in the proportion of ultra-high-end milk powder categories; supplies increased by 1.

64pct; the gross profit margin of cotton spinning category decreased by 9.

37 points, or due to the clearance of some inventory; food gross margin increased by 3.

85pct, the gross profit margin of toys increased by 3.


The profitability has been steadily improved. Accelerating the display of stores has led to a reasonable increase in sales expense ratio.Sales expense ratio increased by 1.

59 points to 19.

36%, mainly due to the company’s newly opened stores (because of the number of newly opened stores, the area compared with the same period of growth and penetration penetration) housing and property management fees, increased labor costs.

Reduce overhead costs by 0.

16 to 2.

84%, the company incurred additional management expenses after granting equity incentives on April 25, 2019. The H1 management expense ratio in the first half of 2019 was further reduced, showing that the company’s management and operating efficiency has improved significantly.

The net profit attributable to mothers increased by 0 as a whole.

47 points to 5.

28%, the company’s profitability maintained a steady upward trend.

Operating cash flow was temporarily interrupted due to business reasons, and operating capacity remained stable.

2019H1 net operating cash flow is approximately -50 million / -100.

58%, of which the net operating cash flow of the company in Q1 2019 was -31.31 million yuan / -164.

77%, mainly due to the implementation of the tax reform on April 1, 2019, the company paid the goods in advance to obtain a discount; the single quarter of 2019Q2 was 30.8 million / -20%, mainly due to the increase in stocking and so on.

The company’s cash flow was in good condition and was temporarily suspended.

Operating capacity remained stable, and the turnover efficiency of accounts receivable and accounts payable remained basically at a reasonable level.

The opening of the store accelerated, and the Chongqing branch realized the consolidation of the Southwest market. Leasing Guangdong stores will officially open the Pearl River Delta region.

① In 2019H1, the company actively expanded the scale of direct-operated stores, encrypted the layout in the East China region, realized 18 new stores, closed 8 stores, a net increase of 10; the company completed Chongqing Taicheng 51.

The acquisition of 72% equity will increase 18 of its affiliated stores. The company will use Chongqing as the center to expand its business in the southwestern market and lay out new opportunities for regional development. Until 2019H1, the total number of direct-operated stores will reach 251.

② The company has signed a contract but has not opened 44 stores. The number of new stores in the second half of the year is significantly faster than the first half. Therefore, the number of new stores 杭州桑拿网 may be more than 62, which is higher than the number of new stores announced in the prospectus.Planning for 50 homes.

Assume that there are 16 closed stores above (8 closed in the first half of the year + 8 in the second half of the year), and the number of net openings will gradually reach more than 46, a significant increase in speed.

③ The company has signed a Guangdong store with an area of about 548 square meters. The company will officially enter the Pearl River Delta region in the second half of 2019 to open up an incremental market.

The acceleration of the exhibition store drive the performance into a period of rapid growth, and the increase in the proportion of private brands promotes continued optimization of profitability.

① In 2019, the company’s exhibition stores will accelerate, newly entering the southwest, and the Pearl River Delta market will contribute incremental growth; it is expected that the company will maintain high-speed exhibition stores from 2020-2021, with the same store high growth + exhibition store acceleration + second new store maturity will drive performance into a high-speed growth channel.

② The strategy of focusing on building own brands has significantly improved profitability: free brands accounted for about 7% in 2017 and nearly 9% in 2018.

Assume that the company will increase the proportion of its own brands to 20% in 2021. The gross profit margin of its own brands will be about 10-15pct higher than that of non-owned brands. The gross profit margin is expected to increase by more than 3pct.

③ In 2019, the company relies on the baby-friendly room app and combines WeChat Mini Program Mall to build an Internet ecological platform for mother-to-child consumption and services that integrates shopping, services, social networking and online education.sponsor.

On March 18, 2019, the company and Tencent alkyl cooperation framework agreement, it is planned to be driven by technological innovation, empower store channels and e-commerce platforms, and create a “mother and baby smart retail” new model.

Investment advice: The only A-share listed leader in maternal and infant retail, channel + distribution points have obvious advantages.

We expect revenue of approximately 25 in 2019-2021.



500,000 yuan, net profit 1.



63 ppm, corresponding to a growth rate of 27% / 30% / 33%, outstanding growth; buy-A investment rating, 6-month target price of 45.

60 yuan, corresponding to 30xPE in 2019.

Risk reminders: Macroeconomic growth is declining; exhibit stores are less than expected; major changes have taken place in the industry structure; e-commerce leaders have aggressively entered the offline market; private brand expansion has fallen short of expectations.