What Are The Factors Behind Lining'S Doubling Gains?

In April 18th, Lining (02331.HK) opened high and closed up 6.78%, at HK $14.18.

The company's share price has hit a new round of rebound, which has doubled since October 2018, and its share price has reached a new high of nearly 8 years, with the latest total market value of HK $31 billion 93 million.

According to the company's announcement after April 17th, the Lining brand product order of the fourth quarter of 2019, which was held by the franchisee in March 2019, excluding the Lining YOUNG, was recorded in the middle of the 10%-20%.

At the beginning of the same quarter of last year, the Lining point of sale calculation has been put into operation since the beginning of the same quarter. As of the first quarter of March 31, 2019, the sales volume of the same platform grew by 10%-20% in the middle of the year.

In fact, Lining (02331.HK) has recently attracted much attention from market funds. Since the low point of 6.33 yuan in October 11, 2018, the share price trend has been steadily upward, and has hit a high of 14.20 yuan today. After half a year, the stock price has reached the highest level of nearly 125%.

Behind the stock price is driven by capital, especially in the mature market of Hong Kong stock. Investors are not the main ones who do not see the rabbits do not hawk the Hawks. Then what is the reason for Lining's 02331.HK?

It is also necessary to harden itself. From the performance of Lining (02331.HK), sustained and steady growth in performance is the main reason for smart capital buying.

According to Lining (02331.HK) 2018 annual report, the company realized revenue of 10 billion 511 million yuan in 2018, up 8 billion 874 million yuan from the same period last year, an increase of 18.45% compared with the same period last year. Net profit attributable to shareholders reached 715 million yuan, up 515 million yuan from the same period last year, an increase of 38.8% over the same period last year; gross profit 5 billion 53 million yuan, an increase of 20.98% over the same period last year; the basic earnings per share were 0.296 yuan, 0.215 yuan in the same period last year, an increase of 37.67% over the same period last year.

In addition, the company's further expansion of channels has also been recognized by the market.

By the end of 2018, there were 7137 stores in Lining's core brand, of which, the Lining young store rose from 173 in 2017 to 793, with an annual net increase of 620 (including 361 dealer stores under the authorized agent in January 1, 2018).

Lining brand sales point increased by 82 to 6344, retail outlets reduced by 35, but wholesale business increased by 117.

From the company's earnings report in 2018, it can be seen that Lining's direct business revenue has been increased from 12 to 23.4% in the 18 years, and the gross profit margin of the direct business has been higher than that of the franchise business.

In addition to offline channels, the company is also vigorously developing e-commerce channel business, the proportion of online channels has increased from 12 years 4% to 22% in 18 years. With the further improvement of the company's e-commerce channel, the contribution of e-commerce channel to the company's revenue will further improve, and it can better drive the company's gross margin level.

In addition, the improvement of the company's operating efficiency is also a fine node of capital.

In 2018, Lining's inventory turnover days decreased by 2 days to 78 days, walking in the forefront of domestic sports brands, the days of accounts receivable decreased from 52 days to 36 days, and the days of accounts payable fell from 83 days to 74 days.

The overall operational efficiency has been significantly improved.

At the same time, it is also a matter of adding fuel to the research report.

We have noticed that since the beginning of 2019, the company has received many "buy" and "overweight" ratings.

Among them, the international investment bank Goldman Sachs, Tianfeng securities, Orient Securities and so on give a "buy" rating and give a higher target price.

From the perspective of the whole industry of sports shoes and clothing, the industry space is still very broad, benefiting from the upgrading of the society's consumption, the participation of sports and the increase of per capita consumption.

This is also an essential course for investors who like to choose strategies from top to bottom.

According to the Research Report of the League of nations securities, the sports industry will continue to develop at a relatively high speed in the next few years. It is estimated that the total annual output of the sports industry will increase by 11.4% in the next 2015-2025 years.

The number of regular physical exercises will also increase from 360 million in 2015 to 435 million in 2020 and 500 million in 2025.

With the increase of income, the upgrading of consumption in the 234 line cities and the demand for specialization in sports specialization, the consumption of per capita sports shoes and clothing is expected to continue to grow.

To implement the domestic sports shoes and clothing enterprises, at present, the international brands Adidas and Nike maintain the leading edge. Lining, Anta sports, Shenzhou International and other domestic brands are catching up. Although there is still a big gap between Brand Company and foreign Brand Company, they are also developing more mature and have room for growth in differentiated competition.

In addition, according to the Customs Tariff Commission of the State Council, since April 9, 2019, the duty rate of 2 has been reduced from 25% to 20%, including sports goods, fishing supplies, textiles and finished products.

Under the background of reducing taxes and reducing fees in China, sports shoes and clothing enterprises are also hit by policy packages, which help the development and profitability improvement of industry companies.

Lining (2331.HK), as the head enterprise of sports shoes and clothing in China, is growing at the forefront of the domestic sports shoes and clothing brand. With the upgrading of the environment and the tax package, the smart capital has long been ambushed.