Sofia (002572): Short-term pressure on the results of the first quarter report, concerns about the improvement of orders and the promotion of large home strategy

Sofia (002572): Short-term pressure on the results of the first quarter report, concerns about the improvement of orders and the promotion of large home strategy
[Event]Sofia released the first quarter report of 2019, reporting a series of realized revenue11.8.4 billion, a decrease of 4 per year.67%, net profit attributable to mothers1.0.7 million yuan, an increase of 3 in ten years.69%, a decrease of 18.32% (mainly investment income), achieving a net cash flow from operating activities of -4.2 trillion (V.S. 18Q1 is -2.5 trillion, mainly affected by the growth of bulk business income). [Comment]1) Under pressure from performance, Simi & Wooden Door business turned losses.①Customized furniture (including OEM furniture and home furnishings): in the report period, it achieved revenue of 10.38 ‰, a decrease of 7 per year.35% (the number of customers is about 8.60,000, previously reduced by 9.58%, the unit price of passengers increased by ten years.43% to 10825 yuan / order), it is expected that it will be mainly dragged down by the negative growth of the C-end business, while the bulk business will grow at a low speed due to the impact of the confirmation cycle; from the perspective of gross profit margin, the gross profit margin of the wardrobe will increase by 0.1pct to 37.65%, while furniture and home furnishings are expected to be affected by promotional activities, and the gross margin extension will decrease by 5.97 points to 19.8%; ②Simi Cabinet: Realize revenue 1.08 million yuan, an increase of 13 in ten years.0%, gross margin increased by 2 in ten years.85pct to 20.84%, realized a net profit of 18.18 million yuan, a loss of 34 in one year.36%; ③ Custom wooden door: realized revenue of 28.38 million yuan, an annual increase of 36.1%, the gross profit margin is relatively reduced by 2.3 points to -4.95%, achieving a net profit of -1377.590,000 yuan, a year of loss reduction of 22.92%; ④ expense ratio: the expense ratio increased by 1 during the reporting period.9 points to 26.3%, of which sales / management / financial expense ratio increased by 1.6/0.4/0.2pct to 12.8% / 10.1% / 0.6%, while the R & D expense ratio is reduced by 0 every year.4 points to 2.8%; ⑤ Channel: The report has increased 57 stores to 3615, of which Sophia / Milana / Dajia Furnishings added 12/6/39 to 2522/134/137 respectively.In addition, the company plans to add 300/100/100/150 stores in Sofia / Smi / Milana / Dajia Furnishings in 2019, adding a total of 650 new stores, and gradually contribute incremental performance. 2) The recovery of orders and real estate sales is expected to drive the rebound in performance.① Real estate sales & orders picked up.In March 2019, the sales area of commercial housing increased by ten years.75%, a slight recovery, and the company ‘s order acceptance situation in March-April has also picked up. Considering that residential sales in 2018 are mainly for homes,合肥夜网 it is expected to usher in delivery from 2019 to 2020, driving downstream demand; ② Big home strategy to increase customer unit prices.The company promotes the big home strategy through matching furniture and the mutual drainage of various categories of products (diversion between big home stores and brands), and the unit price of customers will continue to increase, thereby driving performance growth; ③ Share repurchases will increase performance.The company’s consolidated share repurchase plan (not less than RMB 2 trillion and not more than 3 trillion), as of March 31, 2019, has accumulated a total of 1,088 repurchases.20,000 shares, repurchase amount 2.0 million yuan, the average repurchase price is 18.38 yuan / share. 3) Investment suggestions: It is estimated that the net profit for 2019-2021 will be 10 respectively.8/12.1/13.400 million yuan, EPS is 1.17/1.31/1.45 yuan, corresponding to 18 for PE.7/16.7/15.1X.The short-term performance pressure will not change the long-term growth trend and maintain the recommended level. Risk warning: Real estate continues to be sluggish, cabinet business is worse than expected, and industry competition is intensifying.