Professional Documents
Culture Documents
24 August, 2011
the HK$6 mn provision for bad debt in 1H10, net profit increased 107% YoY in 1H11.
Our Take
1H11 sales increased by 25.6% YoY, beating our estimate by 16%, driven by strong New Concept Store (NCS) sales and recovery of sales in 1H11, vs. 6% in 2H10, while non-NCS achieved double non-NCS store sales. The 137 total NCS contributed 14% of total digit YoY same-store sales growth, slightly up from the 2010
Market cap 6M avg. daily turnover Outstanding shares Free float Major shareholders Net debt/equity BVPS (2011F) P/B (2011F) P/E (2011F)
Financial outlook Year to Dec Sales (HK$ mn) EPS (HK$) Div. yield (%) ROE (%) 2010 485 0.02 5.4 3.8
US$359.4 mn US$0.1 mn 2,002.1 mn 34.7% Dr. Tsai Yen Yu and family, 32.8% Net cash HK$0.37 3.8x 28.5x
level. Overall, its average sales per store grew by 36.4% in 1H11. 1H10, 1H11 gross margin contracted 250 bps YoY to 77.8%,
Excluding the HK$25 mn provision for slow-moving inventory in missing our estimate of 79.0% by 120 bps, mainly due to higher in 2H11 to ease the cost pressure.
50.9%, beating our estimate by 1.1 ppt, mainly due to a 2.5 ppt drop in A&P expenses as a percentage of sales, as the company has widened its media channels to include magazines and the internet. Previously the promotions were carried out by more
expensive traditional channels such as gifts and free samples. Reiterate BUY: We believe Natural Beautys recovery is on track, and our positive view on its shares remains. We are reviewing our estimates, but given the impressive 1H11 results for now we reiterate our BUY rating.
Primary Analyst: Charles Z. Yan, CFA +852 3969 9530 charles.yan@yuanta.com With significant contribution from:
Catherine Chen
+86 21 6187 3823 catherinechen@yuanta.com
ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES BEGIN ON PAGE 2. Yuanta does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
2.8 1 2.6 2.4 2.2 2 1.8 1.6 1.4 1.2 1 0.8 Aug-11
Source: Bloomberg, Yuanta Research Notes: A = price adjusted for stock & cash dividends; B = unadjusted target price; C = target price adjusted for stock & cash dividends. Employee bonus dilution is not reflected in A, B or C.
Current distribution of Yuanta ratings
Yuanta
China: Personal Products 24 Aug, 2011
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Yuanta
China: Personal Products 24 Aug, 2011
Johnny Wong Head of Metals & Mining +852 3969 9524 johnny.wong@yuanta.com
Tom Hsu Head of Taiwan Sales Trading +886 2 2175 8800 tom.hsu@yuanta.com Kerry Chen - Sales +886 2 2175 8922 kerrychen@yuanta.com Jenny Lo Sales Trading +852 3969 9769 jenny.lo@yuanta.com Joyce Wan Sales +852 3969 9876 joyce.wan@yuanta.com
Leo Hu - Sales +886 2 2175 8880 leo.hu@yuanta.com Sammy Mui Sales +852 3969 9875 sammy.mui@yuanta.com Jason Wang Sales Trading +886 2 2175 8888 Jason.wang@yuanta.com
Vickie Hu - Sales +852 3969 9878 vickie.hu@yuanta.com Charles Nissen - Sales +852 3969 9832 charles.nissen@yuanta.com Sharon Zhao - Sales +852 3969 9870 sharon.zhao@yuanta.com
Chan Hui Sales Trading +852 3969 9728 hui.chan@yuanta.com Fiona Tan Sales +886 2 2175 8921 fiona.tan@yuanta.com
Michael Lin - Sales +886 2 2175 8977 michael.lin@yuanta.com Ming Yi Tan - Sales +852 3969 9879 mingyi.tan@yuanta.com