Taiping Bird's Net Profit In The First Half Was Reduced By 3 To Become A Drag On Sales Expenses.

603877.SH sales increase year by year, dragging up performance growth.

In August 20th, Taiping bird revealed half year report. In the first half of 2019, Taiping bird recorded a net profit of 3 billion 120 million yuan and 132 million yuan respectively, down 1.54% and 33.06% respectively, and double net profit in revenue. Meanwhile, the revenue of the two major brands declined in the first half of the year.

In this regard, Taiping bird said that the decline in performance is due to the growth of the number of Direct stores and the increase of brand marketing input, and the cost has increased.

According to insiders, the performance of Taiping bird in the first half of the year is indeed affected by its cost rate.

According to the statistics of the Yangtze daily, the Taiping bird has invested more in the cost of sales, which has been listed for 3 years, and the sales cost has increased by over 800 million yuan before the listing.

　 After the listing, earnings growth is blocked.

Public information shows that Taiping bird landed in Shanghai successfully in 2016, but its performance growth slowed down after listing A. Data show that in 2016 -2018, Taiping bird realized revenue of 6 billion 327 million yuan, 7 billion 155 million yuan and 7 billion 712 million yuan respectively, representing an increase of 7.06%, 13.07% and 7.78% respectively, and net profit of 427 million yuan, 448 million yuan and 572 million yuan respectively, representing an increase of -20.31%, 4.95% and 27.51% respectively.

In 2018, the net profit of Taiping bird increased considerably, mainly due to the growth of government subsidies, disposal of assets and total investment income over the same period, up 106 million yuan over the same period. To sum up, the growth rate of Taiping bird is experiencing bottlenecks after listing.

In addition, the revenue of the two main brands of Taiping bird declined.

Public information shows that in the many brand clothing of Taiping bird, PEACEBIRD women's clothing and PEACEBIRD men's revenue are up to 7 in all clothing brands.

Semi annual report shows that in the first half of 2019, the revenue of PEACEBIRD women's wear and PEACEBIRD men's clothing were 1 billion 102 million yuan and 1 billion 84 million yuan, respectively, down 2.58% and 4.81% respectively. In addition, the revenue of Mini Peace children's wear reached 366 million yuan, down 3.65% compared with the same period last year. Only LEDiN women's clothing sales revenue of 418 million yuan, up 12.39% over the same period.

Sales cost increased by 800 million yuan in three years.

Although the Pacific bird has been hindered in its growth, its investment in sales expenses has remained high and has been increasing for many years.

Data show that in 2016 -2018, the sales cost of Ping bird was 2 billion 202 million yuan, 2 billion 449 million yuan and 2 billion 666 million yuan respectively, accounting for over 3 of the total revenue in the same period, up 18.86%, 11.21% and 8.53% respectively over the same period. Statistics show that in 2015, the sales cost of Taiping bird was 1 billion 853 million yuan, three years on the market, and 814 million yuan in terms of sales cost, with an average annual increase of 271 million yuan.

In the first half of this year, the sales cost of Taiping bird was still growing, up to 1 billion 339 million yuan, up 11.49% from the same year, and the increase was 2.61% over last year.

Insiders said that the increase in sales costs was one of the drag on the achievements of Taiping bird in the first half of the year.

In this regard, Taiping bird said in its earnings report that the increase in sales costs was due to an increase in the number of Direct stores and increased investment in brand marketing. In recent years, Taiping bird has been adjusting the proportion of Direct stores.

In 2016 -2018, the number of direct shops in Taiping was 1198, 1271 and 1516 respectively, accounting for 28%, 29.90% and 33% of the total number of stores in the same period. However, the gross profit margins of Direct stores were 65.80%, 64.93% and 64.51%, while the proportion of Direct stores increased, while gross margins decreased. Up to the first half of 2019, there were 1589 stores in Taiping bird's direct shop, accounting for 35.89% of the total number of stores, and the gross profit margin of Direct stores was 67.49%, an increase of 2.89% over the same period last year.

Although the adjustment effect of the direct store seems to be beginning to show, in fact, the gross profit margin of the Taiping bird in the first half of the year has increased because of the increase in the discount rate of the direct selling and sales of many brands, and the cost has dropped sharply.

In this regard, the industry said that sales cost control and inventory control is one of the important ways to improve profitability of Taiping bird in the future.