Jerry Peng 彭港祥
+86 755 23976722
[email protected]
28 August 2011
Gloomy Outlook, Maintain ‘Neutral’
前景黯淡，维持“中性”
z
z
The SSSG for the first half was only 14%, which resulted from a sharp
decrease of SSSG in 2Q11 from the 17.5% in 1Q11 due to the unexpected
weather condition according to the management. The Company targets to
achieve a 10% net addition in store count in 2011. Average Selling Price
(ASP) increased of around 8% for Spring/Summer 2011 collection contributed
to the 1.5% gross profit margin expansion of the retail segment. The ASP also
increased of around 8% for Fall 2011 collection, which also helps to expand
the gross profit margin in 2H11.
GTJA Research 国泰君安研究
Company Report: Ports Design (00589 HK)
公司报告：宝姿 (00589 HK)
Neutral
Rating:
Maintained
评级：
中性 (维持)
6-18m TP 目标价:
HK$12.47
Revised from 原目标价:
HK$20.20
Share price 股价：
The SG&A surged by 2.9% yoy to 52.1% as a percentage of total turnovers
due to strong growth of operating leases. The management also expects
similar trend in the 2H11. Effective income tax rate surged by 16.6% yoy to
28.1% and was expected to be the same in 2011. We revised down our
FY11-13 basic EPS forecasts by 12.1/18.7/18.8% due to higher gross profit
margin, selling expenses forecasts and effective tax rate forecasts.
HK$13.200
Stock performance
股价表现
30.0
% of return
20.0
10.0
z
The Company is facing increasing competition from global luxury brands in
the domestic market. The same store sales growths of the Company are
relatively weak. The network expansion is back to a prudent level but the
revenue contribution is limited near term. Also the revenue contribution
guidance from LEB business was revised down from 20% to 15%. The net
profits are expected to be eroded by the sharp increase in effective tax rate.
We maintain our Neutral rating and cut Target Price to HKD12.47,
representing 12x 2011 forward PE.
0.0
(10.0)
(20.0)
(30.0)
(40.0)
(50.0)
Jan-00
Nov-10
HSI
Feb-11
May-11
Ports Design
Aug-11
二季度的同店增长显著低于一季度的 17%导致上半年同店增长只有 14%,管理层解释为天
气原因。公司预期全年店铺数量有 10%的增长。春夏季货品零售单价增长了约 8%，为公
Change in Share Price
股价变动
司的零售业务毛利率带来了 1.5%的提升。2011 年秋季货品平均单价同样提升了 8%，相
信对公司下半年毛利率的提升有帮助。
z
Abs. %
绝对变动 %
Rel. % to HS index
相对恒指变动 %
Avg. share price(HK$)
平均股价（港元）
由于租金费用提升，上半年销售和行政费用率提高了 2.9%至 52.1%。管理层预期下半年将
保持相同趋势。有效税率大幅提升了 16.6%至 28.1%而预期全年将保持于这一水平。由于
更高的毛利率，销售费用和有效税率的预测，我们调低了公司 2011-13 年每股盈利预测
3M
3 个月
1Y
1年
-22.7
-31.8
-30.9
-10.0
-16.5
-26.0
15.1
16.9
19.5
Source: Bloomberg, Guotai Junan International
12.1/18.7/18.8%。
z
1M
1 个月
Ports Design 宝姿 (00589 HK)
z
公司在国内市场面临国际奢侈品牌的激烈竞争。同店增长较弱。虽然店铺数量重回温和增
长，但是短期收入贡献有限。另外管理层也把代理品牌的销售贡献目标从 20%下调到了
15%。公司利润受到较高的有效税率侵蚀。 我们维持中性评级和并下调目标价至 12.47 港
Year End
年结
12/31
Turnover
Net Profit
EPS
EPS
PER
BPS
PBR
DPS
Yield
ROE
收入
股东净利
每股净利
每股净利变动
市盈率
每股净资产
市净率
每股股息
股息率
净资产收益率
(RMB m)
(RMB m)
(RMB)
(△%)
(x)
(RMB)
(x)
(RMB)
(%)
(%)
2009A
1,538
468
0.830
10.7
13.0
2.402
4.5
0.730
5.5
37.9
2010A
1,718
473
0.836
0.7
13.0
2.912
3.7
0.491
3.7
31.5
2011F
1,980
482
0.852
1.9
12.7
3.338
3.2
0.426
3.2
27.3
2012F
2,229
512
0.904
6.2
12.0
3.790
2.9
0.452
3.4
25.4
0.961
6.2
11.3
4.270
2.5
0.480
3.6
23.8
2,469
544
2013F
Shares in issue (m) 总股数 (m)
Market cap. (HK$ m) 市值 (HK$ m)
3 month average vol. 3 个月平均成交股数 (‘000)
52 Weeks high/low (HK$) 52 周高/低
568.5
7,504.1
2,097.5
24.250 / 13.000
Major shareholder 大股东
Free float (%) 自由流通比率 (%)
Net gearing 净负债/股东资金 (%)
10-12 PEG (X) 市盈率/增长率
Mr. Chan & family 38.7%
61.3%
0.5%
3.1
Source︰the Company, Guotai Junan International.
See the last page for disclaimer
Page 1 of 6
Company Report
元。
Disappointing results. Shareholders’ profit increased by 2.7% yoy to RMB214 mn (accounting for 40.1% and 38.9% of the
consensus and our estimates, respectively) on 13.8% revenue growth, below expectations. Overall gross profit margin
margin increased by 3.1% yoy to 31.9% because the SG&A surged by 2.9% yoy to 52.1% as a percentage of total turnover
was offset by the one-off government grants of RMB40.3 mn as well as gross margin expansion. But effective income tax rate
further increased by 16.6% yoy to 28.1%, which was significantly higher than the guidance of 17-18% given in March 2011. As
at June 30, 2011, the Company had 362 retail outlets, a net increase of 9 stores compared to the end of 2010.
28 August 2011
improved by 1.7% yoy to 81.6% mainly attributable to the gross profit margin expansion in retail business. Operating profit
Table-1: Ports Design’s results analysis
RMB mn
1H10
1H11
YoY
Turnover
788.9
897.7
13.8%
Strong contribution from the retail segment
Comments
Retail
732.4
838.8
14.5%
14% SSSG of retail business
OEM
45.5
40.2
-11.8%
Others
11.0
18.8
71.1%
(158.3)
(164.8)
4.1%
630.6
732.9
16.2%
9.7
50.2
420.1%
Selling and distribution expenses
(345.6)
(427.6)
23.7%
Administrative expenses
(43.0)
(40.5)
-5.8%
One-off government grants
Increases in rental payments, salaries and benefits,
depreciation charges and advertising costs
Decline in the non-cash option expense
Other operating expenses
(24.4)
(29.0)
18.6%
Increase in stock provision
Profit from operations
227.3
286.0
25.8%
Gross profit
Other revenue
Net Finance income (costs)
7.8
11.5
47.8%
Profit before taxation
235.1
297.6
26.6%
Income tax
(27.0)
(83.7)
210.5%
Profit for the year
208.1
213.8
2.7%
Minority interests
Profit attributable to equity holders
of the Company
Basic EPS (RMB)
(1.1)
0.7
-163.4%
209.2
213.1
1.8%
0.370
0.375
1.3%
Gross margin
79.9%
81.6%
1.7%
Operating margin
28.8%
31.9%
3.1%
Net margin
26.5%
23.7%
-2.8%
Significant increases in raw material prices, including
wool, cashmere, and especially cotton
Foreign exchange gain
Higher preferential tax rate; dividend withholding tax
GPM expansion of retail segment
Gross margin expansion, one-off government grants
and decline in the non-cash option expense
Higher preferential tax rate
Ports Design 宝姿 (00589 HK)
Cost of sales
Source: the Company, Guotai Junan International.
2H2011 outlook. The 1Q11 Same Store Sales Growth (SSSG) was 17.5%. But the SSSG for the first half was only 14%,
which resulted from a sharp decrease of SSSG in 2Q11 due to the unexpected weather condition according to the
management. We are concerned on the risk of SSSG to below expectations. The Company targets to achieve a 10% net
addition in store count in 2011. But we believe the revenue contribution to be minimal. Average Selling Price (ASP) increased
of around 8% for Spring/Summer 2011 collection contributed to the 1.5% gross profit margin expansion of the retail segment.
The ASP also increased of around 8% for Fall 2011 collection, which also helps to expand the gross profit margin in 2H11. The
SG&A surged by 2.9% yoy to 52.1% as a percentage of total turnovers due to strong growth of operating leases. The
management also expects similar trend in the 2H11. Effective income tax rate surged by 16.6% yoy to 28.1% and was
We revised down our FY11-13 EPS forecasts by 12.1/18.7/18.8%, respectively. We maintained our FY11-13 revenue
forecasts and revised up our gross profit margin and selling expenses forecasts. Also we revised up our effective tax rate
estimates according to the management. As a result, we revised down our FY11-13 basic EPS forecasts by 12.1/18.7/18.8%
to RMB0.852/0.904/0.961, respectively. We are now expecting the Company to deliver net profit CAGR of 4.8% in FY10-13.
See the last page for disclaimer
Page 2 of 6
Company Report
expected to be the same in 2011.
Table-2: Key assumptions
(RMB mn)
Total Revenue
Old
Changes
2011F
2012F
2013F
2011F
2012F
2013F
2011F
2012F
2013F
1,980
2,229
2,469
1,980
2,229
2,469
0.0%
0.0%
0.0%
Cost of sales
-386
-435
-485
-395
-445
-508
-2.3%
-2.3%
-4.5%
Gross Profit
1,594
1,794
1,984
1,585
1,784
1,961
0.6%
0.6%
1.2%
655
694
734
653
760
824
0.3%
-8.7%
-10.9%
Operating Profit
Net Profit
482
512
544
548
630
670
-12.1%
-18.7%
-18.8%
Basic EPS (RMB cents)
0.852
0.904
0.961
0.969
1.113
1.183
-12.1%
-18.7%
-18.8%
Gross Profit Margin
80.5%
80.5%
80.4%
80.0%
80.0%
79.4%
0.5
28 August 2011
New
Changes (ppt)
0.5
0.9
% SG&A of total turnover
46.6%
46.9%
48.0%
45.2%
44.1%
43.9%
1.4
2.7
4.0
Operating profit margin
33.1%
31.1%
29.7%
33.0%
34.1%
33.4%
0.1
-3.0
-3.6
Effective tax rate
28.0%
28.0%
28.0%
17.0%
18.0%
20.0%
11.0
10.0
8.0
Net profit margin
24.4%
23.0%
22.0%
27.7%
28.3%
27.1%
-3.3
-5.3
-5.1
Source: Guotai Junan International
Maintain Neutral rating and cut Target Price to HKD12.47. Ports brand had been very successful in the Chinese luxury
women’s wear market with a strong loyal customer base in the past. But the Company is facing increasing competition from
global luxury brands in the domestic market. The same store sales growths of the Company are relatively weak. The network
expansion is back to a prudent level but the revenue contribution is limited near term. Also the revenue contribution guidance
from LEB business was revised down from 20% to 15%. The net profits are expected to be eroded by the sharp increase in
Company Report
Ports Design 宝姿 (00589 HK)
effective tax rate. We maintain our Neutral rating and cut Target Price to HKD12.47, representing 12x 2011 forward PE.
See the last page for disclaimer
Page 3 of 6
Income Statement
2009A
2010A
2011F
2012F
2013F
Turnover
1,538
1,718
1,980
2,229
2,469
Cost of sales
(283)
(358)
(386)
(435)
(485)
Gross profit
1,255
1,360
1,594
1,794
1,984
Other revenue
28 August 2011
Yr end 31 Dec (RMB m)
46
18
65
29
31
Distribution costs
(658)
(733)
(840)
(955)
(1,086)
Administrative expenses
(57)
(74)
(83)
(89)
(99)
Other operating expenses
(65)
(73)
(81)
(86)
(96)
Profit from operations
524
510
655
694
734
Net Finance income (costs)
(2)
23
15
17
21
Profit before taxation
522
533
670
711
755
Income tax
(53)
(61)
(188)
(199)
(211)
Net profit
468
473
482
512
544
0.830
0.836
0.852
0.904
0.961
EPS (RMB)
Source: the Company, Guotai Junan International
Yr end 31 Dec (RMB m)
PP&E
2009A
2010A
2011F
2012F
2013F
262
349
358
350
344
Lease prepayments
4
3
3
2
2
Intangible assets
21
0
0
0
0
Other assets
28
43
43
43
43
Total non-current assets
315
396
404
396
389
Inventories
448
545
614
656
712
Trade and other receivables, deposits and prepayments
265
312
358
396
433
Pledged deposits
627
502
552
607
668
Fixed deposits
39
165
0
0
0
Cash balance
794
348
649
814
966
2,173
1,871
2,172
2,472
2,779
Trade payables, other payables and accruals
370
230
316
369
414
Interest-bearing bank borrowings
734
356
338
321
305
1,124
610
678
714
742
Total current assets
Total current liabilities
Total non-current liabilities
7
8
8
8
8
Shareholders' equities
1,358
1,649
1,890
2,146
2,418
Book value per share (RMB)
2.402
2.912
3.338
3.790
4.270
Ports Design 宝姿 (00589 HK)
Balance Sheet
Company Report
Source: the Company, Guotai Junan International
See the last page for disclaimer
Page 4 of 6
Yr end 31 Dec (RMB m)
2009A
2010A
2011F
2012F
2013F
Profit before tax
522
533
670
711
755
Depreciation and amortisation
43
62
57
60
64
Interest expense
12
4
3
3
3
(Interest income)
(13)
(16)
(19)
(21)
(24)
Others
32
52
0
0
0
Working capital change
24
(117)
(29)
(27)
(49)
Income tax paid
(81)
(71)
(188)
(199)
(211)
Operating cash flow
540
435
495
527
538
Purchase of PP&E
(142)
(155)
(59)
(45)
(49)
(6)
32
(20)
(24)
(26)
Investing cash flow
(149)
(123)
(79)
(69)
(75)
Dividend paid
(135)
(418)
(241)
(256)
(272)
Other financing activities
230
(340)
126
(38)
(38)
Financing cash flow
95
(758)
(115)
(294)
(310)
Change in cash
486
(446)
301
165
153
Cash balance at year end
794
348
649
814
966
Other investing activities
28 August 2011
Cash Flow Statements
Source: The Company, Guotai Junan International
Yr end 31 Dec
2009A
2010A
2011F
2012F
2013F
Gross margin (%)
81.6
79.1
80.5
80.5
80.4
Operating margin (%)
34.0
29.7
33.1
31.1
29.7
Net profit margin (%)
30.4
27.5
24.4
23.0
22.0
ROE (%)
37.9
31.5
27.3
25.4
23.8
ROA (%)
21.4
19.9
19.9
18.8
18.0
Inventory turnover days
563
506
548
533
515
Account receivable days
40
37
36
37
38
Account payable days
95
78
83
66
65
Current ratio (x)
1.9
3.1
3.2
3.5
3.7
Payout ratio (%)
87.8
58.8
50.0
50.0
50.0
Company Report
Source: The Company, Guotai Junan International
Ports Design 宝姿 (00589 HK)
Financial Ratios
See the last page for disclaimer
Page 5 of 6
Company Rating Definition
The Benchmark: Hong Kong Hang Seng Index
Rating
Definition
Buy
Relative Performance >15%;
or the fundamental outlook of the company or sector is favorable.
Relative Performance is 5% to 15%;
or the fundamental outlook of the company or sector is favorable.
Accumulate
Neutral
Relative Performance is -5% to 5%;
or the fundamental outlook of the company or sector is neutral.
Reduce
Relative Performance is -5% to -15%;
or the fundamental outlook of the company or sector is unfavorable.
Sell
Relative Performance <-15%;
or the fundamental outlook of the company or sector is unfavorable.
28 August 2011
Time Horizon: 6 to 18 months
Sector Rating Definition
The Benchmark: Hong Kong Hang Seng Index
Time Horizon: 6 to 18 months
Rating
Outperform
Definition
Relative Performance >5%;
or the fundamental outlook of the sector is favorable.
Neutral
Relative Performance is -5% to 5%;
or the fundamental outlook of the sector is neutral.
Underperform
Relative Performance <-5%;
or the fundamental outlook of the sector is unfavorable.
(1)
(2)
(3)
(4)
The Analysts and their associates do not serve as director in the listed corporation mentioned in this Research Report.
The Analysts and their associates have no financial interests in the listed corporation mentioned in this Research Report.
Except for Shandong Chenming (01812), Guotai Junan and its group companies do not hold more than 1% of the market capitalization
of listed corporation mentioned in this Research Report.
Guotai Junan and its group companies have not had investment banking relationships within the preceding 12 months for the listed
corporation mentioned in this Research Report.
DISCLAIMER
This Research Report does not constitute an invitation or offer to acquire, purchase or subscribe for securities by Guotai Junan Securities
(Hong Kong) Limited ("Guotai Junan"). Guotai Junan and its group companies may do business that relates to companies covered in
research reports, including investment banking, investment services and etc. (for example, the placing agent, lead manager, sponsor,
underwriter or invest proprietarily).
Ports Design 宝姿 (00589 HK)
DISCLOSURE OF INTERESTS
Any opinions expressed in this report may differ or be contrary to opinions or investment strategies expressed orally or in written form by sales
persons, dealers and other professional executives of Guotai Junan group of companies. Any opinions expressed in this report may differ or
be contrary to opinions or investment decisions made by the asset management and investment banking groups of Guotai Junan.
Though best effort has been made to ensure the accuracy of the information and data contained in this Research Report, Guotai Junan does
not guarantee the accuracy and completeness of the information and data herein. This Research Report may contain some forward-looking
estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredictable and
mutable situation, so uncertainty may contain. Investors should understand and comprehend the investment objectives and its related risks,
and where necessary consult their own financial advisers prior to any investment decision.
This Research Report is not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located
in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would
subject Guotai Junan and its group companies to any registration or licensing requirement within such jurisdiction.
See the last page for disclaimer
Company Report
© 2011 Guotai Junan Securities (Hong Kong) Limited. All Rights Reserved.
27/F., Low Block, Grand Millennium Plaza, 181 Queens’ Road Central, Hong Kong.
Tel.: (852) 2509-9118
Fax: (852) 2509-7793
Website: www.gtja.com.hk
Page 6 of 6