[China shoes Network - industry news] 2015 China sports apparel enterprises achieve better performance, revenue to achieve double-digit growth, earnings growth of more than 20%. More functional product sales led to the profit margin. The rapid growth of e-commerce beyond expectations, we expect the diversification of the channel will boost revenue growth. R & D expenditure is gradually increasing, mainly used to improve the design and improvement of product functionality. Although subject to a higher base of the impact, 16 year revenue is expected to slow growth, but we predict that in a stable profit margins and brand / channel diversification driven by profit will maintain the steady growth of 10-20%. We in the sports apparel industry preferred Baosheng International (3813HK) and Lining (2331HK).
Key points of support rating
Gross margin improvement and effective cost control: as a result of the high average price of functional products and lower investment costs, the overall gross profit margin increased by 0.1-2.0 percentage points in 15 years. We expect continued investment in the brand will pull the average price and sales. At present, the company has increased R & D spending, we believe that this is very important to shape the image of the brand. And as a result of the overall operating cost control properly, operating profit margin between 15-20%.
The industry's steady growth: most of the company's 16 years 3 quarter orders order volume growth compared to the slowing in the first half of the year, mainly because of the relatively higher base and 15 in the fourth quarter same store sales growth slowly make the market is expected to be cautious. However, in the current inventory control strictly and the number of stores open a small number of cases 5-15% orders will order growth has been more robust. Most of the company's inventory sales ratio is controlled within five months. That is, the order growth rate is mainly driven by product mix improvement.
Optimistic about the positive progress of digital marketing: we are optimistic about the positive progress of e-commerce, which is the key to the establishment of a full range of digital systems. For example, XTEP's current e-commerce revenue growth reached 10-15% (Lining 8.6%). We expect e-commerce will gradually become an important channel for sales of new products and special offerings, and no major service in clear inventory. For example, Lining is working with the Jingdong and millet, 360 degrees with Baidu and television cooperation, XTEP and SF EXPRESS cooperation, strengthen the logistics and launch intelligent products.
Multi brand: in addition to the diversification of channels, we note that the company to take a number of brand strategy to help strengthen the sub brand of professional or fashion. For example, Anta's Fila (high-end fashion) and Desanto (high-end outdoor sports), 361 of its OneWay (high-end outdoor sports), Lining's LNG (high-end fashion). At the same time, the children's category is also growing rapidly, the company's strategic layout of the next generation.
We in the industry Chinese sports apparel preferred including Lining and baosheng. We believe that: 1) the POU Sheng International, the Chinese market for Nike and Adidas products strong demand will continue to support same store sales growth, and will stimulate margin expansion. New brand cooperation will become the new growth momentum of network expansion. 2) Lining's recovery process is slower than expected, mainly because the channel inventory is higher than the industry average, but the investment logic is still in profitability, we expect 2016 to inventory and gross profit margin will have a more significant improvement. 3) Anta's excellent execution and multi brand strategy will continue to boost revenue growth and profit margins, despite the slowdown in the industry. 4) to Belle International, the footwear business growth is expected to slow growth, but sports apparel business will achieve double-digit growth; 5) Shen Chau international product mix optimization and RMB devaluation will support the double-digit revenue growth and profit rate of expansion. The company currently intends to allocate more resources for women's underwear business, the market potential is huge, which is expected to boost future revenue growth. China shoes Network - the most authoritative and professional footwear industry information center.