Yuanzu shares (603886): Sleep card confirmed to increase profits

Yuanzu shares (603886): Sleep card confirmed to increase profits

Investment Highlights Accounting Change Sleep Card Confirms Thickening Results Yuan Zu shares announced Q1 2019 results and recorded revenue3.

4 ‰, +23 a year.

7%, recorded a net profit of -6.82 million yuan, expanded and reduced several times a year, performance exceeded market expectations.

As stipulated by the Ministry of Commerce, the advance receipt cannot exceed 40% of the previous year’s revenue. Yuanzu actually started to issue prepaid stored value cards in 2010, and 重庆耍耍网it has accumulated consumption trends regarding prepaid cards.

Starting from 2019, the company calculates sleep cards with an age of more than 4 years and calculates them into corresponding quarterly income based on actuarial calculations.

19Q1 corresponds to the 15Q1 sleep card recall. The impact on income / profit is 26.72 million yuan / 22.25 million yuan. If this part of the impact is excluded, 19Q1 revenue / profit will increase by +15 in the same caliber.

1% / 2.

5%, exceeding the range further narrowed.

Introducing new products for the Spring Festival to alleviate uneven seasons. The company’s actual sales season is Q2 / Q3. In recent years, the company has been trying to replace the quarterly imbalances. In addition to selling card coupons in Q4, 19Q1 introduced special Spring Festival gift boxes to stores, which eased the traditional off season of Q1In the case of 19Q1, the actual sales revenue (excluding the impact of sleep card confirmation) is at least +15.

1%, compared with +2 in the first half of 18Q1.

4% improvement, of which cake / Chinese and Western pastries / fruits / other categories earn 11% / 20 per year respectively.

3% / 15.

7% / 8.

9%, the traditional cake revenue increased significantly.

The adjusted company’s advance receipts increased by about 6% compared with the end of 2018, laying the foundation for Q2’s revenue.

The gross profit increase was obvious, and the proper fee control benefited from the decrease in the cost of some packaging materials and raw materials + the increase in the proportion of gift boxes in the Spring Festival. Excluding the effects of sleep cards, the gross profit margin in 19Q1 decreased by +1.

8ppt, while the sales expense ratio / management expense ratio (including R & D expenses) +0 each time.

1ppt / -0.

5ppt, the company generally opens stores and publicity in Q1, there is room for seasonal improvement in the future.

The April cake price increase contributed to the income, and there is room for future costs to fall. In addition to the confirmation of sleep cards, Yuanzu’s performance this year is also supported by price increases.

Starting from April 1 this year, Yuanzu started a new price increase cycle for its affiliated cakes and fruit gift boxes. The price increase range is about 10-25%. Assuming constant sales, it is expected to contribute more than 4% of revenue growth.However, we believe that the space for the decline in sales expenses lies in the savings in labor costs and rents after sinking to third- and fourth-tier cities.

From the 2018 annual report, Yuanzu’s overall sales expense ratio was +0 for half a year.

52ppt, mainly due to the increase in labor costs and advertising costs.

The company’s sales staff increased by 442 in 18 years. If the cost of sales personnel is calculated based on this caliber, it will be about -2% in 17 years, and the single store rent will also total -0.

8%, it is expected that the cost will be lowered after sinking to third- and fourth-tier cities and re-planning.

And by expanding the scope of delivery, the transportation cost rate has increased slightly.

We believe that during the continuous expansion and sinking of Yuanzu, the unit rental cost is expected to decrease while the cost-effectiveness of employees is prominent, and there is room for the company’s future sales expense ratio to continue to decline.

Earnings forecasts and estimates are affected by the revenue from sleep card recognition. We raise our forecasted earnings forecast. In 2019, we expect the sleep card to repay 41.54 million yuan, which is expected to affect profits of 39.74 million yuan. Assuming we follow the 2015 advance payment11.

8% of the amount will be repaid in advance for the sleep card, and the income will be 22 in 2019-2021.

8 ppm / 25.

4 ppm / 27.

9 trillion, each year +15.

7% / 11.

1% / 9.

9%, net profit is 3 respectively.

42 ‰ /南京夜网论坛 4.

12 ‰ / 4.

84 trillion, each year +34.7% / 20.

5% / 17.

6%, the current company is expected to correspond to 19/20 PE is 17X / 14X, maintain “Buy” rating.

Risk warning: Mooncake demand is affected by policies / Store rents and labor costs increase faster than expected