The Recovery Trend Of Leather Shoes Industry Is Obvious. AOKANG International Is Turning Over To Sing!

The main trend of leather shoes industry is clear, and the original business will grow steadily in the future.

1) the direct revenue business, which accounted for 62% of the total revenue, increased by 18.42% in the first half of the year, with double-digit growth in single store efficiency.

The success of the pavilion's business model is expected to bring about 200 AOKANG stores in the future.

2) although the distribution business was flat in the first half of the year, but the terminal inventory pressure improved, the company recovered part of the dealer's inventory, which affected the company's accounts receivable decreased significantly, and rushed back to part of the asset impairment provision. In the future, with the gradual improvement of the domestic economy, including consumption, it is expected that accounts receivable will still have room for improvement.

3) the employee stock ownership plan was completed in December 12th, 2014, and fully mobilized the enthusiasm of the staff.

Acting Skech brand will become a new profit growth point for the company in the future.

1) Skech is in the period of rapid growth. It is already the second largest sports shoes brand in the United States. The annual average compound growth of 13 and 13 is 23.46% and 272.83% respectively.

2) Skech's sales in the second tier cities in the country were good, the same store grew by 64% in the first half of the year, the monthly sales of single store were above 30-40 million yuan, the average discount rate was 2% off, and the net profit rate of the direct store was 15-20%.

3) the product is highly functional and the price is between the domestic brand and the international first-line brand.

4) the space of the channel is large, and the plan of 1000 1000 stores is expected to be completed ahead of schedule.

5) exercise

The recent strong recovery trend has provided a very good external environment for the company's agent Skech brand. The rise of the last round of national movement has promoted the rapid growth outside BELLE's main business. We expect that this round is likely to be AOKANG!

The 25.66% stake in Lanting Pavilion is a gold mine neglected by the market.

We expect that the two companies will promote cooperation from three aspects in the future, and 1) pass international brands, especially European brands.

Introduced into China.

2) make the whole leather shoe industry an industry Internet Co, 3) O2O is the inevitable trend of the future development of the footwear retail industry. The two companies will strengthen cooperation with O2O in the future. Once successful, they will greatly enhance their market position and profitability.

Financial forecast and investment suggestion

We expect the company's earnings per share for 2015-2017 years to be 0.95, 1.24, and 1.77 yuan respectively (the original forecast for 2016 and 2017 was 1.06, 1.24 yuan yuan), referring to the average valuation of the comparable company, giving the company 24 times PE in 2016, and the target price was 29.76 yuan, maintaining the "buy" rating.

Risk warning

Skech develops slower than expected risks.

The International Pavilion is advancing at a slower pace than expected.