Feike Electric (603868) 2018 Annual Report Comments: Fourth-quarter results are slightly lower than expected
Investment Highlights: The company’s fourth-quarter revenue performance was slightly higher than expected.Realized operating income of 39 in 2018.80,000 yuan, an annual increase of 3.2%, net profit attributable to mother 8.45 ppm, an increase of ten years.14%, corresponding to EPS 1.94 yuan / share; of which the income in the fourth quarter was 11.$ 5.7 billion, an average of 2 per year.74%, net profit attributable to mother 2.24 ppm, 10-year average4.78%, fourth quarter revenue performance was slightly lower than expected.The company plans to pay a cash dividend of 15 yuan for every 10 shares, with a dividend rate of 77.33%, dividend yield 3.19%, in line with expectations.  Broady drove down the average price of razors, and the offline wholesale channel adjustment ended.In terms of product price, electric shaver revenue was 27.34 ppm, a ten-year increase4.56%, of which sales increased by 6.25%, unit price fell by 1.59%, mainly due to the rapid growth in revenue of the sub-brand vPro, which lowered the average unit price. The report predicts that the revenue of the scheduled Feike shavers will be basically flat, and the revenue of the vPro shavers will increase by 51%;1 ppm, a 10-year increase of 3.20%, of which sales volume and average price increased by 1.28% and 1.89%, slightly slower than expected.In terms of different channels, e-commerce revenue accounted for 54%, with an annual increase of 7.16%, the number of online income in the second half of the single removal increased slightly by 0.57%, compared with the peak value expected, the growth momentum of e-commerce declines faster; 2%, mainly due to the adjustment of the wholesale channel, the offline revenue in the second half of the year to see multi-year growth in offline revenue.45%, the growth rate improved by 7 compared with the previous quarter.44 pcts, indicating that the dealer adjusted the basic notice level one; overseas business achieved sales of 2,430 million (+ 5%), and gradually replaced branded customers with brand dealers. The proportion of Feike’s own brand sales rose from the end of 2017 to 760% at the end of 2018.At first, the number of dealers was 670, which decreased by 12 each year in 2017.  Asset-light properties remain unchanged and profitability is guaranteed.The gross profit margin was basically the same as the same period of last year, mainly due to the automatic transformation and downgrading of cost efficiency. At present, the company’s shaver expansion production ratio is 71%, which will increase by 10 percentage points by 2017.In terms of period expenses, the company’s sales expense ratio increased by 1.09 pcts, mainly due to the increase in advertising spending in sports events in 18 years, and the management expense ratio (including research and development expenses) rose by 0.With 26 pcts, the financial expense ratio was basically flat, and the company’s overall net interest rate dropped by 0.43 to 21.25%.In terms of balance sheet, bills receivable and accounts receivable increased by nearly 3 trillion, which was mainly due to the sales of raw materials receivable from the newly established Feike Purchasing Services Company, and the number of goods in inventory increased by 1.$ 8.7 billion, reduction due to the company’s intention to strengthen safety stocks after the out of stock crisis in early 2018, but due to the release of new products, the estimated size is about 1, excluding the new product stocking factor, the company’s 杭州桑拿网 inventory management is good; the budget for advance receipts has decreased by 38%To 29.84 million yuan, it may indicate that dealers are not enthusiastic about making money.As for the cash flow statement, the company’s net cash flow from operating activities decreased by 35% to 5.54 ppm was mainly due to the establishment of Feike Purchasing Services Company in 2018. Changes in sales settlement methods have led to a reduction in operating cash inflows.  Profit forecast and investment rating.We lower the company’s 2019-2020 net profit forecast to 9 respectively.5.6 billion and 10.6.8 billion (previous average 9).91 ppm and 11.4.8 billion), plus a 2021 net profit forecast of 11.68 ppm, corresponding to 2 EPS.20, 2.45 and 2.68 yuan, corresponding to dynamic price-earnings ratio of 21, 19 and 18 times, maintaining the “overweight” 杭州桑拿 level.