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Sofia (002572) Company Review Report: Actively Adjusting Future Expectations
Event: The company released its 2019 performance report, and Sofia expects to achieve operating income of 77 in 2019.27 ppm, a five-year increase of 5.69%, net profit attributable to mother 10.7 ppm, an increase of 11 in ten years.56%.Among them, it is expected to achieve operating income of 24 in the fourth quarter of 2019.15 ppm, an increase of 9 in ten years.52%, net profit attributable to mothers3.50,000 yuan, an increase of 31 in ten years.00%, the fourth quarter performance exceeded market expectations.  1. Product-side upgrade + Sesso linkage + new strategy. The company’s fourth-quarter performance exceeded market expectations. Sofia’s products and channels were actively adjusted in 2019, and its fourth-quarter performance improved significantly.1) Product structure upgrade, mid- to high-end products continue to grow, dealer profitability and confidence have been greatly improved, and expansion efforts have continued to increase.  2) Mr. Liu Zeqin actively promoted the cooperation between the company and the company. In 2019, the company is expected to achieve 900 million revenue. At that time, + 20%. Mr. Liu also systematically managed the dealers, formulated new incentive policies and assessment systems and was unanimously approved by the dealers.  3) Sofia invites external experts to formulate new strategies through long-term research and visits to maintain healthy and stable growth in 2020.In addition, the company replaced the Chinese women’s 北京夜网 volleyball team with an image spokesperson and strengthened its cabinet expert positioning, so that the Sophia brand occupied consumers’ minds with a more precise positioning.  2. The company actively responded to the impact of the new crown epidemic. The advantages of the mature Internet team highlights Sofia’s early adjustment to deal with the impact of new crown pneumonia. We expect that the level of revenue performance in 2020 will be small, and it will only be late and not absent.1) The company has a mature Internet team, and executives formulate an e-commerce-based play based on the epidemic situation, and continue to optimize the plan.According to the overall results, the epidemic will not affect the company’s orders, the new play is quite effective, and Sofia’s earlier layout on e-commerce platforms such as Tmall and JD.com is rich in resources, which is conducive to buffering the possible impact of the epidemic.2) On-site services such as measurement and installation are affected by the epidemic and the backlog is expected to be late.The orders received during the peak period in March (3/15 event) may be affected by the epidemic situation and will be measured and installed in April to May. If the epidemic situation gradually disperses, the impact on the company is expected to be limited.3) The Huanggang plant in Hubei was shut down due to the impact of the epidemic. The product has been transferred to other factories for production and the logistics costs are borne by the distributors. We expect Hubei sales to be affected by the epidemic, but its proportion is only 1%.Big.4) The epidemic may optimize the industry structure, increase market concentration, and benefit leading companies in the long run.  3. The opening online activities exceeded expectations. The stable growth of performance in 2020 can be expected. At the beginning of the new year, Sofia opened the opening online activities, and the effect of receiving orders exceeded expectations.As a result of the outbreak, the company adjusted the long-term sales targets of distributors.2019?The net profit attributable to mothers will increase by 11%, 13%, and 14% respectively in 2021. At present, the corresponding 20-year PE is 14x, and the investment rating of “Strongly Recommended-A” is maintained.  Risk warning: outbreak may affect more than expected, multi-category and multi-channel development is lower than expected