Mercury Home Textiles (603365): Q3 gross margin increased sharply, operating conditions continued to improve

Mercury Home Textiles (603365): Q3 gross margin increased sharply, operating conditions continued to improve

The growth rate of Q3 gross profit margin increased, the company went online and offline in parallel, the brand continued to upgrade and optimize, the cash gradually improved, and the income gradually increased, maintaining an overweight rating.

  Key points of investment: maintaining the level of increase in holdings: the diversified layout of online channels, the optimization and optimization of offline channels, the product maintains the leading edge of the mid-range market, and at the same time further develops niche areas.

Maintain the company’s EPS for 2019-2021.



54 yuan, 深圳spa会所 target price 21.

39 yuan, maintaining the overweight level.

Gross profit margin increased, sales expense ratio increased, and net profit margin was optimized.

The company’s Q3 gross profit margin was 38.

95%, an increase of 5 over the same period last year.

79pct, mainly due to the increase in product price bands, is expected to continue to improve profitability as the proportion of high-margin products in autumn and winter increases.

Q3 company period expenses 21.

88%, up 2 every year.

68pct, mainly because the company continued to increase brand marketing expenses in the third quarter, and the sales expense ratio increased by 3.

02 points.

Taken together, the net profit margin for Q3 is 10.

78%, an annual increase of 1.

29 points.

Inventories and accounts receivables improved, and operating 北京夜网 cash flow improved.

The company’s Q1-3 inventory turnover days were 168.

98 days, a decrease of 12 from the same period last year.

In 64 days, the company’s inventory turnover improved, showing that the company’s operating conditions have been continuously optimized after upgrading online and offline.

19Q1-3 Net operating cash flow was -1.

09 billion, an improvement of 5051 over the same period last year.

530,000 yuan.

The online adjustment has achieved remarkable results, and the offline channels have been continuously upgraded.

Online, the company has reached full coverage of major e-commerce platforms, and its diversified layout has helped the company achieve long-term healthy growth.

Offline, the company opened direct-operated stores, small stores turned into large stores, and the store image was updated, which helped the company to maintain the leading brand advantage.

In terms of products, while the company has entered the subdivisions of weddings and children, it has adopted the “extremely large single product” strategy to strengthen the marketability of single products and continue to consolidate its brand advantages.

The online and offline channels go hand in hand, the brand is constantly upgraded and optimized, and the company’s revenue continues to grow.

Risk warning: Online business adjustments are less than expected, and store expansion in third and fourth tier cities is less than expected.