Qumei Home (603818) Delayed Performance Delayed Waiting for Profit Turning Point

Qumei Home (603818) Delayed Performance Delayed Waiting for Profit Turning Point

Investment Highlights The company released the 2018 annual report and the 2019 first quarter report: the company realized revenue 28 in 18 years.

9.2 billion (+37.

88%), net profit attributable to mother-0.

5.9 billion (compared with 2 last year).

4.6 billion), deducting non-attributed net profit -0.

3.5 billion (last year was 2).

2.7 billion); 19Q1 achieved revenue of 10.

0.5 billion (+154.

79%), net profit attributable to mother 0.

1.2 billion (-57.

91%), deduct non-attributed net profit of 0.

02 billion (-92.

01%).

Ekornes acquired by the company in 18 years (holding 90.

5%) Consolidated income contributed four months.

2.8 billion, net profit attributable to mother is estimated to contribute 78.68 million, excluding the consolidation factors, the company’s 18-year endogenous income is expected to be about 6%, and net profit attributable to mother is about -1.

3.8 billion.

Overseas acquisition expenses and direct store adjustments dragged down profit performance: The company completed its acquisition of Ekornes, a well-known Norwegian mid- to high-end furniture company, in September 18, incurring M & A-related expenses. According to the performance forecast, loan interest expenses incurred in 18 years were approximately 1.

30,000 yuan, exchange costs 0.

68-0.

8.5 billion yuan, the agency fee is about 0.

80,000 yuan, the asset evaluation value-added amortization expense is about 0.

3.5 billion, total 3.

13-3.

300 million.

In addition, the company cooperated with Jingdong in 18 years to build the Qumei · Jingdong Living Museum, which led to the closure of the Beijing flagship store for 135 days, and the opening of 7 new direct-operated stores rented out labor costs.

Achieve global supply chain synergy with Ekornes to strengthen categories and brands: Ekornes has 5,394 stores worldwide, of which Stressless has 3271, IMG has 1,713, Svane has 410; 2269 in Europe, 1273 in Asia Pacific, 1422 in North America, and othersThere are 430 in the region; 9 factories are located in Norway, the United States, Lithuania, and Southeast Asia;

Of the 2.8 billion, Norwegian mainland1.

2.9 billion, Europe (except Norway) 3.

4.7 billion, North America 3.

07 billion, Asia Pacific and others1.

4.4 billion, with outstanding first-mover advantages.

Positioned as a mid-to-high-end brand, Stressless is a global champion of comfortable chair sales. It can collaborate with the company’s high-end business channel to contribute revenue for 18 years.

300 million, with a gross profit margin of 56.

5%; IMG positioning and pricing are similar to the company’s China Life Museum channel, which can expand its category and contribute revenue for 18 years.

4.4 billion, with a gross profit margin of 46%; mattress brand Svane has excellent craftsmanship, which can reinforce the company’s existing software products, and contribute 0 years of revenue in 18 years.

5.4 billion.

At the same time, the company will change Ekornes’ global supplier system, promote the company’s raw material procurement and reorganization, carry out global supply chain layout of important production raw materials such as wood and leather, and reduce procurement costs. The transition from finished products to customization has been steadily progressing, and the merger of large home furnishing strategies: the company’s revenue from customized furniture products for 18 years5.

9.4 billion (+40.

17%), sales increased by 35.

4%, gross margin of 43.

03% (+1.

78pct), realizing both volume and price increases; income from finished furniture11.

600 million (-17.

87%), gross profit margin 36.

52% (-3.

3pct); jewelry and other 0.

9.6 billion (-35.

81%), gross profit margin 22.

25% (+5.

45pct).

At the same time, the company continued to promote the sample work of cabinet products in the store, and basically completed the channel layout of the cabinet product line in your + living museum. The cumulative growth rate in 18 years has exceeded 300%.The category strategy continued to deepen.

In addition, the company actively implemented the strategy of “reducing SKUs and reducing costs” and launched an order pool optimization project in September 18, which can increase the sheet material to more than 85% at a time to optimize production costs.

Channel optimization improves terminal competitiveness and enters new retail expansion orders: In 18 years, the company successfully completed the total scale1.

$ 500 million dealer shareholding plan to achieve the combination of core dealer interests and company interests; comprehensively promote the construction of a new retail marketing system, help dealers increase traffic, expand unit value, and complete the store image optimization of nearly 200 old storesUpgrade; at the same time continue to optimize the online drainage model, open new online traffic entrances such as Douyin, Xiaohongshu, etc., effectively reduce customer acquisition costs, online sales 0.

6.8 billion (+12.

97%); the performance of bulk channels is stable, and revenue is realized2.

0.6 billion, gross profit margin 58.

65%.

The proportion of income in first, second and third tier cities is 26 respectively.

63% / 33.

50% 36.

80%, the channel continued to sink.

As of the end of 18, the company has a total of 1036 stores (+161), of which you + 649 museums (including high-end brand everything, Fanxi), a net increase of 30 earlier, 306 B8 whole house custom (+79)There are 60 (+45) home and living halls in almost all types of stores, and the number of directly operated stores has reached 21 (+7).

In 2019, the company plans to open 30 new stores for you + life, 70 custom B8 houses, and 50 homes for living. The Vance and Everything brand plans to open 30 new stores and 180 stores in total.speed.

The consolidation resulted in a substantial increase in expenses and a good operating cash flow: the company’s gross profit margin for the year 18 was 42.

41%, an increase of 3 per year.

54pct, due to cost optimization of endogenous business, and higher gross profit margin of consolidated business.

The total period expense ratio is 42.

24% (+17.

83pct), of which the sales expense ratio increased by 7.

89pct to 24.

30% is the expansion of Ekornes sales expenditure; the management + R & D expense ratio also increased by 4.

82pct to 12.

86% was due to merger and reorganization expenses and labor costs; the financial expense ratio also increased by 5.

12pct to 5.

08% was due to loan interest income from mergers and acquisitions.Due to the consolidation of accounts receivable of Ekornes, the inventory and other subjects increased significantly.

Taken together, the company’s 18-year operating cash flow net3.

120,000 yuan (+23.

00%), still achieving solid growth, and 19Q1 is 1.

390,000 yuan, -0 compared with the same period last year.

Growth of US $ 5.3 billion continues to improve.

Gradually, the new retail layout promotes long-term growth: In the long run, the company continues to optimize store opening strategies, accelerate store openings, and continue to expand the living museum series. The new retail model has developed smoothly, and it has replaced overseas mergers and acquisitions to improve the supply chain and channel layout.

In 2019, the company expects that domestic operating income will increase by 杭州桑拿 about 15% per year, and overseas operating income will increase every other figure; it is expected that consolidated net profit will reverse losses to surplus, and overseas net profit will increase one by one.

Although the company’s 18-year performance was hindered and dragged down, we are optimistic that the company will usher in a profit turning point in 19 years.

Profit forecast and investment grade: The company’s revenue is expected to be 50 in 19-21.

8/56.

4/61.

900 million (+75.

7% / + 11.

0% / + 9.

8%), net profit attributable to mother 2.

62/3.

94/4.

60 billion (+544.

1% / + 50.

4% / + 16.

7%), corresponding to PE of 14.

50X / 9.

64X / 8.

26X, maintaining the “overweight” rating.

Risk warning: Ekornes’ overseas integration fails to meet expectations, and channel expansion fails to meet expectations