Baby-friendly Room (603214) 2019 First Quarterly Report Review: Gross Margin Continues to Increase, Non-profit Growth 25% Meets Expectations

Baby-friendly Room (603214) 2019 First Quarterly Report Review: Gross Margin Continues to Increase, Non-profit Growth 25% Meets Expectations

Event: The company disclosed the first quarter report of 2019. The revenue and net profit attributable to the mother were 5 respectively.

45 billion and 0.

18 billion, an annual increase of 13.

21% and 46.

44%, the operating net cash flow growth rate was -164.


The Q1 store was profitable and its revenue increased by 13.

21% mainly benefited from the 18 years of newly opened stores entering the mature period.

The number of offline stores at the end of the Q1 period of the company was 224, an increase of 28 each year, an increase of 1 compared to 18Q4 (6 new stores opened, 5 closed stores), the possibility of 19Q1 exhibition.

The company’s 19Q1 revenue growth rate was 13.

21%, lower than last year’s growth rate. The growth was mainly driven by the 18-year-old new store owners gradually entering the normal operating period.

We believe that short-term exhibition shops may actively adjust the pace of opening stores for the company in the short term. After Q2, the exhibition shops tried to speed up, so that the probability of completion of 50-60 stores was in conflict.

The product structure continued to be optimized and gross profit margin increased by 1.

32pct, driving non-profit growth of 25%.

The company’s gross profit margin reached 26 in 19Q1.

5%, increase by 1 every year.

32pct, core category milk powder sales have a higher growth rate (+18.

73%) and gross profit margin temporarily increased4.

89pct is the main driving force, and the improvement of the gross profit margin of milk powder mainly benefits from: the replacement is the increase in the proportion of high-end milk powder sales; and it also benefits from the better bargaining power reflected by the company’s scale purchase effect, and the optimization of product structure continues to drive the company’s gross profit margin.

In terms of expenses, the company’s three rates increased by 1.

3pct, mainly affected by the increase in the shrinkage of sales expenses.

In addition, investment income in 19Q1 was 4.37 million, an increase of nearly 3.5 million over the same period last year.

In summary, the company’s net profit attributable to its parent in 19Q1 was 17.76 million, which will increase by 46 in the future.

4%, a non-profit increase of 24 in ten years.


The company’s net operating cash flow for Q1 was -31上海夜网论坛.31 million yuan, with an annual extension of 164.

77%, mainly due to the purchase of goods, due to the rapid increase in the amount of taxes and fees paid.

Investment suggestion: The company re-developed the leading mother and infant retail retail in East China, and the endogenous + extension channels have ample space for sinking. This year, it will focus on expanding the South China and Chongqing markets, and the strategy of going global will continue to be implemented.

We are optimistic about the company’s deterministic opportunities for performance growth in the next few years, and it is expected that the EPS in 19-21 will be 1.

52, 1.

92 and 2.

33 yuan, corresponding to the latest PE is 28X, 22X, 18X, maintain the company’s “Buy” rating.

Risk warning: forecast of macroeconomic growth rate; intensified competition in the industry; same-store operating data decline.