Yixintang (002727): Abundant Funds Reserve Excess Ammunition for Scale Expansion

Yixintang (002727): Abundant Funds Reserve Excess Ammunition for Scale Expansion

Event: On May 29, the company announced that it intends to increase capital 重庆夜生活网 to its subsidiaries in Sichuan, Chongqing, Guizhou and Shanxi; it also plans to issue short-term financing bonds with a size not exceeding RMB 1.2 billion; it plans to issue medium-term notes with a size not exceeding RMB 400 million, The term does not exceed 3 years (including 3 years); in order to support the Guangdong Baiyuantang chain (Yixintang indirect holding).

21%) business development. The company provides consulting services to Baiyuantang, and Baiyuantang pays service fees not exceeding 200 million per year.

Comments: 1.

Sufficient funds, accumulated for the expansion of the scale, ammunition company plans to issue no more than 1.2 billion short-term securities, underwriting method is balance underwriting, and plans to issue no more than 400 million US dollars bills, the funds are mainly used to supplement working capital and improve the company’s income.
In addition, the company raised funds by issuing convertible bonds on May 16.

960,000 yuan, plus monetary funds at the end of the first quarter13.

9.5 billion and 90 million wealth management products. If short-term financing and medium-term notes are issued smoothly, the total state of total funds can reach 36.

810,000 yuan (not taking into account the 400 million medium-term notes to be redeemed on October 20, 1919).

Sufficient funds will help the company achieve its self-construction and merger and acquisition goals, and continue to increase the regional city’s share and profitability.

As of the end of the first quarter, the number of Yixintang stores reached 6005, of which 275 were newly opened, a net increase of 247 earlier.

Looking back at Q1 to Q4 in 2018, there were a net increase of 89, 109, 207, and 287 stores, accelerating quarter by quarter. In 19Q1, the pace of rapid expansion was still maintained. The sufficient funds for the scale plan to increase the target scale base of another 1,200 storesProvide support for future performance growth.

2.

Increase capital to subsidiaries in core strategic regions, and indirectly make efforts in Guangdong to enhance profitability outside the province. The company intends to use its own funds to add 80 million yuan to the Shanxi subsidiary, 70 million yuan to Guizhou, and 30 million yuan to Chongqing.Sichuan increased its capital by RMB 50 million to improve the profitability and core competitiveness of its subsidiaries as a whole.

In addition, in the Guangdong market, the company indirectly distributes in Guangdong by providing consulting services to its subsidiary, Guangdong Baiyuantang.

The company’s core strategic areas Sichuan, Chongqing, Guangxi, Hainan, and Shanxi have strengthened their regional scale advantages, and their brand influence has continued to increase. In 18 years, except Sichuan (excluding Panzhihua), other provinces in Guizhou were profitable.

The proportion of new and old stores in Sichuan increased 19 times, and it is expected to turn around.

On the whole, the company’s external share in the province is constantly increasing. Sichuan, Chongqing, Guizhou, Guangxi, Hainan and other places have shown scale. Yixintang’s expansion model in Yunnan (centralized store opening in the early stage, preliminary refined management, and subsequent encryption layout) is inThe replication outside the province was successful, and the initial results were gradually entering the harvest period. Regional bargaining and profitability continued to improve.

Profit forecast: The company ‘s high-density, low-area layout strategy and self-built main expansion model value will be realized in performance improvement. It is estimated that the net profit in 19-21 will be 6 respectively.

7.7 billion, 8.

38 billion, 10.

2.7 billion, corresponding to PE24 / 19/16 times, maintain “Buy” rating.

Risk warning: M & A prices in the primary market fluctuate, store expansion speed and subsequent mergers are lower than expected.

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