Semir Costumes: A Steady Multi Brand Clothing Leader

　
The company is a leading multi brand clothing enterprise under its banner. Semir brand and balabala Domestic respectively Casual wear and children's wear industry Second and number one brand. In recent years, the rapid expansion of the company's main channel of relying on franchising and the advantage of the dual brands going hand in hand have achieved rapid growth. The compound growth rate of operating income and net profit from 2007 to 2010 is 51% and 88% respectively, and the gross profit margin keeps steady rising. During the period, the cost control is strict, and the net interest rate level keeps the leading position in the industry.

　　
    Semir casual wear The core competitiveness of the business is mainly based on the business model of franchising, which has strong channel development capabilities, diversified product development capabilities that match brand positioning, efficient supply chain management capabilities and unique "harmonious and win-win" business philosophy.

　　
Taking into account the scale base and the development stage, we consider the company Semir casual wear The growth will enter a relatively stable and more quality stage. From the analysis of specific growth drivers, we believe that the future growth of Semir casual wear comes from the extension of customer base on the one hand. On the other hand, it comes from the quality growth of channels - the growth of channel number, the increase of single store area, the steady rise of flat effect and the improvement of channel operation efficiency brought by the adjustment of franchisees.

　　
    Barbara's children's wear The core competitiveness of the business lies in its first advantage, the concise and profound brand concept, the better quality control and supply chain management, the design concept close to children and the convenient and convenient marketing channel.

　　
We believe that the company's children's clothing business will continue to maintain a relatively high growth rate, and its growth rate will significantly exceed the growth of Semir's brand casual wear. Based on the huge market potential of children's wear market, the very scattered competitive situation in the industry, the company's advantages in the operation of children's clothing and the relatively small sales scale, we maintain relatively optimistic expectations for the growth of children's wear. We believe that the future growth of the Balabala brand will mainly come from the rapid expansion of the channel (quantity expansion, single store area promotion and efficiency improvement) and the increasingly rich category.

　　
About company and American Apparel In comparison, our basic viewpoints are as follows: these two excellent enterprises with different styles have their own strengths and weaknesses, and will achieve good growth expectations in the development track of their own strategic positioning. The advantage of Semir clothing lies in its long-term accumulation of channel resources and the expansion ability of franchising, as well as the first advantage of children's clothing business. The company has a high level of management with high unity and comprehensive ability. The company has strong control over cost and cost, so it is at the leading level in the net profit margin, and also significantly outperforms the American state dress.

　　
The short board of Semir clothing may lie in its future control and operational efficiency problems that its non flattened franchisee system may face.

　　
Earnings forecasts and investment ratings: we expect earnings per share from 2011 to 2013 to be 2.10 yuan, 2.80 yuan and 3.69 yuan respectively, and the compound growth rate of profits in the next three years will be around 35%.

　　
Considering the company's texture, growth and the valuation level of its peers, we consider that the valuation of the company's 25 times 2012 is more reasonable, corresponding to the target price of 70 yuan. First buy the "buy" rating.

　　
Investment risk: the development speed of casual wear business is lower than expected, and the possible impact of the positive promotion of self purchase big shop strategy on business.