Second Quarter Footwear Sales Data Released, BELLE Growth Momentum

In view of the apparent slowdown in the mainland's economic growth and the uncertain economic outlook, the downturn in the retail market is expected. According to the National Bureau of statistics, the total retail sales of consumer goods increased by 14.4% year-on-year in the first half of this year, a slowdown of 2.4% over the same period last year, of which retail sales of clothing, shoes and hats and needle textiles increased by 16.9% year-on-year. However, the desire to expand domestic demand has not been reduced, making the market look forward to more stimulus measures or improving the weakness of the retail market.

The income growth of retail enterprises is much worse than before. Largest inland Women's Shoes Retailer's BELLE International (01880) increased its footwear sales in the second quarter of this year to 10.5%, an increase of 20% over the same period last year, but it has improved significantly compared with 2.8% in the first quarter of this year. While Daphne (00210) maintained 22% of the same store sales growth in the first quarter, the second quarter data dropped to 14%, which was also affected.

Purchase six hundred self operated retail stores, sporting goods inventory problems to be solved

The demand for products will weaken and the rent will skyrocket. The industry will be weak and strong. BELLE also slowed down shop opening in the first half of this year. During the period, the number of mainland stores grew by 1014. The main strategy to improve the same store sales of existing stores is to help maintain profitability in unstable market conditions. However, the industry's inventory reduction activities continued to increase, and the inventory turnover days increased by 15 days to 167.6 days last year. I believe there will be moderate sales promotions this year, or will have a negative impact on gross margin.

The inventory problem of sporting goods has not been solved, and some enterprises are sending surplus police, so the industry prospect is not optimistic. However, the group's sportswear business and same store sales improved from 2.4% in the first quarter of this year to 5% in the second quarter. Currently, sales agents are the main distributor in the second quarter, and the proportion of Nike and Adidas accounts for about 8 to half. Because of the high awareness of the two brands in the mainland and the rich structure of the goods, the scale of the single store is generally larger than that of the second-line brand, and its profitability is strong, so that the group has a competitive advantage in the industry.

The group successfully acquired BigStep in March this year. It has 600 self operated retail stores mainly selling Nike and Adidas brand products, which can produce synergy with the existing business of the group and further expand the income of sportswear division. The Group expects BigStep to bring in close to 2 billion yuan a year. In addition, under the cooperation of the existing sales channels, the group has set foot in the middle and low grade women's shoes market with "fifteen minutes" brand, but the business is at the initial stage, and it is temporarily difficult to compare with the existing size of Daphne.

Covering a wide range of services to consolidate the leading position, the target is 15 yuan.

The terminal group set up 15964 retail outlets in the mainland, 11022 of which are footwear shops, and the rest are sportswear shops, all of which are directly managed by the group. They cover a wide range and help the group consolidate its leading position. The sales situation of the group has improved in the second quarter, and the outlook is expected to improve.

The forecast price earnings ratio is 19.3 times, and the valuation is reasonable. On the trend, the 10 antennas have gone higher than the main average lines, forming a "golden margin", but the past two trading days showed a "scratch". The fast pace random index (STC)% K line dropped to the%D line level in the oversold area. The short line saw that the profit could be set back, it could be less than 13.1 yuan to absorb, the rebound resistance was 15 yuan, and did not fall through 12.5 yuan to be able to continue to hold.