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Qumei Home (603818): Short-term pain during the transition period awaits the transformation of New Qumei

Qumei Home (603818): Short-term pain during the transition period awaits the transformation of “New Qumei”

Investment Highlights The company released its semi-annual report for 2019: the combined company achieved operating income20.

1.1 billion (+106.

62%), net profit attributable to mother 0.

7.2 billion (+1.

71%), deducting non-net profit of 0.

5.9 billion (-10.

36%).

Among them, Q2 achieved revenue of 10 in a single quarter.

0.6 million yuan, (+73.

80%), net profit attributable to mother is 5988.

330,000 yuan (+41.

05%), net profit after deduction 5734.

50,000 yuan (+39.

34%), profit performance improved significantly from the first quarter.

19H1 Ekornes consolidated income contribution12.

420,000 yuan, the main business profit 90.67 million yuan, excluding the consolidation factor is expected to the company’s endogenous income7.

6.9 billion (21% a decade ago).

Ekornes’s domestic channel construction has achieved initial results, and it is expected to contribute incrementally: The integration of Ekornes by the integration of the company is smooth, and its brands, Stressless 南京夜网论坛 / IMG / Svane, have achieved revenue 9 respectively.

72/1.

94/0.

RMB 760,000: (1) No pressure to continue the layout of stores in the country in the form of independent brand franchise stores. At present, there are 50 domestic stores with a revenue of more than 30 million yuan, which exceeds the growth rate by more than 50%; (2) IMG brand is in storesStores, brand cooperative stores, coffee shops, etc., have multiple outlets. At present, the number of experience points in the country is close to 400, the order volume exceeds 10,000 sets, the product delivery is 6000 sets, and the sales revenue exceeds 20 million yuan; (3)The company expects that Ekornes’s initial domestic expectations1.

With an income scale of more than 200 million, it has grown by nearly 300% in the past year.

Steadily enter the big family strategy, reduce SKUs, reduce costs and increase efficiency: the Qumei segment achieved revenue7.

US $ 3.5 billion, we expect that it expects major furniture companies to continue to complete the transition to customization, and the rest of the finished furniture business will be under pressure, but we expect that custom furniture will grow faster.

At the same time, the company continued to promote the cabinet sample work of cabinet products, basically completed the channel layout of the cabinet product line in your + living hall, and tested the wooden door business in direct channels. The multi-category strategy continued to deepen.

In addition, the company actively formulated the strategy of “reducing SKUs and reducing costs”. In the first half of the year, the first batch of SKUs that had been phased out had been discontinued, and production efficiency had been improved to a certain extent. The second batch of inefficient SKUs was planned to go offline in September.

The acquisition of Ekornes, a well-known Norwegian mid-to-high-end furniture company, was completed in September 18, and the consolidation led to a significant increase in the company’s period of expenses, with sales / management (including R & D) / financial expenses of 5 respectively.

05/2.

48/1.

50,000 yuan, the expense rate is 25.

11% (+8.

02pct) / 12.

35% (+1.

7pct) / 5.

23% (+5.

3pct).

Due to the higher gross profit margin of Ekornes, and the production department of the company controlled production costs by eliminating inefficient SKUs, merging layout departments, and optimizing production procedures, the gross profit margin of the company in 19H1 was 43.

7% (+6.81pct).

Taken together, the company’s net sales margin is 4.

4% (-2.

82pct) Accounts receivable and notes on the accounts at the end of the reporting period4.

1.4 billion, a decrease of 0 from the beginning of the period.

1.8 billion, accounts receivable turnover days increase by 10 every year.

67 days to 35.

73 days; inventory 6.

5.2 billion, an increase of 0 from the beginning of the period.

2.6 billion, inventory turnover days increased by 46 over the same period.

37 days to 101.

51 days.

Initial operating cash flow of the company 2.

980,000 yuan, an increase of 663 in ten years.

3%.

Profit forecast and investment grade: The company has continuously optimized its store opening strategy, and the new retail model has developed smoothly. At the same time, overseas mergers and acquisitions have improved the integration of the supply chain and channel layout, and have long-term vitality.

The company’s revenue is expected to be 45 in 19-21.

79/50.

77/56.

3.0 billion (+58.

3% / + 10.

9% / + 10.

4%), net profit attributable to mother 2.

04/3.

80/4.

7.9 billion (+445.

5% / + 86.

1% / + 26.

0%), corresponding to PE of 16.

91X / 9.

09 X / 7.

21X, maintaining the “overweight” rating.

Risk warning: Ekornes integration fails to meet expectations, channel expansion exceeds expectations