Concentration Of Sports Goods Industry Increased By Nearly 50%.

According to the world clothing and shoe net, Guotai Junan issued a report.

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The growth of brand and e-commerce business is particularly strong, and the target price is 3.5 yuan.

By the end of June, 360 degrees had 5859 stores in China and sold more than 2000 outlets overseas.

The company's revenue in the first half of the year increased 9.5% to 2 billion 800 million yuan (RMB, the same below), which basically met.

And the bank's expectation is mainly driven by the fast growth of children's clothing business and e-commerce business; net profit increased by 16.5% to 320 million yuan over the same period, and the benefit cost control improved.

In the first half of the year, the company paid an interim dividend of 0.06 yuan per share and a dividend payout rate of 39.6%, and management indicated that it would maintain a dividend level of not less than 40% throughout the year.

Increasing concentration of sporting goods industry

In the first eight months of this year, China's sports and entertainment products retail sales grew by 18% year-on-year, and the growth rate was significantly higher than that of last year's 13.9%.

In addition, diversification of sports items and improvement of sports facilities also promote the development of sports goods industry.

In addition to more common sports such as running, swimming and ball games, some of the less popular ice and snow sports, golf, boxing, extreme sports and so on have also received more attention, which has led to the consumption of related sports equipment.

Guotai Junan believes that China's sports industry will maintain rapid growth in the next few years, and the sporting goods industry will also benefit from the rapid development of the sports industry.

On the other hand, the competition pattern of the sporting goods industry is changing.

With the deepening of sports participation, consumers' professional requirements for sports equipment have also been improved.

As a result, the lack of professional small brands has been phased out, and more consumers are willing to assume higher prices to buy more professional brands, which is called "consumption upgrading".

This trend has led to the increasing concentration of sporting goods industry and the flow of market share to several well-known brands both at home and abroad. The Matthew effect of sports goods industry is expected to be more obvious in the coming years.

31st degree now has 331 degree main brand, children's wear brand and "One Way" brand, facing different consumer groups.

Among them, children's wear brands grew rapidly. In the second quarter of this year, the order of children's clothing orders increased by about 25%. In the first half of this year, children's clothing business contributed 11% of the total revenue, and the number of sales outlets reached 1791.

The brand of children's clothing has become a major competitive advantage in the industry. Guotai Junan believes that the liberalization of the two child policy and the improvement of the income level of residents will create a huge market space for children's wear market. It is expected that the children's clothing business in the next two years can maintain double-digit growth.

International income increased by nearly 50%

In terms of channel, the company vigorously developed the business of electronic commerce, and acquired the former distributor of e-commerce in August last year, converting the business of e-commerce to self operated business. In the first half of the year, the electronic business platform contributed 4.1% of the total revenue.

The company also vigorously develops international business. In the first half of the year, the company has 848, 1116, 135 and 23 sales outlets in the US, Brazil, Europe and Taiwan respectively.

During the period, international business revenue grew 44.2%, accounting for 2.3% of total revenue. The company will adopt a more radical development strategy next year, and plan to increase it to 5% to 10% in the next 3 to 5 years.

In addition, overseas research and development products have been nominated by many well-known international magazines, and the company will gradually introduce overseas research and development achievements into the domestic market in order to form synergy effect.

Judging from the recent growth in orders and retail sales, the company is growing at a relatively robust and steady pace, especially in the growth of children's clothing brands and e-commerce businesses.

Several major shareholders of the company allotted shares to unrelated third party investors on 27 September, accounting for 7.25% of the total share capital of the company.

The rights issue has dealt a severe blow to investor confidence in the short term, but it has no effect on the company's financial fundamentals.

Guotai Junan believes that the multi brand and multi-channel strategy can support its long-term rapid growth and give HK $3.5 target price.

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