Oriental Fashion (603377): Off-site Project Steady Advancement of VR Model Expected to Reduce Costs

Oriental Fashion (603377): Off-site Project Steady Advancement of VR Model Expected to Reduce Costs

Event overview: The company released the third quarter report of 2019 and achieved revenue8.

5.5 billion, an annual increase of 5.

90%; net profit attributable to mother 1.

91 ppm, an increase of 0 in ten years.

02%; deduct non-net profit 1.

420,000 yuan, an increase of 88 in ten years.


In addition, the company announced that the second and third phases of the employee shareholding plan were postponed to 2020.


5; Amend the company’s articles of association, increase the scope of business to increase the management of car driver test sites, the management of certain public parking lots, and car rental.

  Analysis and judgment: Performance analysis: We analyze that the income growth mainly comes from aviation school training, etc .; the growth rate of net profit attributable to mothers is lower than the income growth rate, mainly due to: (1) increase in financial expenses (+ 59%); (2) decline in government subsidies; (3) The decrease in investment income by 65% was mainly due to the decrease in the purchase of wealth management products and the monopoly of Inner Mongolia companies under the equity method; the growth rate of non-net profit was higher, mainly due to: (1) the decline in government subsidies: mainly due to Beijing in 18The compensation for the demolition of the eastern part of the headquarters is about 40 million yuan; (2) The impact of minority shareholders’ equity has been reduced by more than 30 million yuan. We judge that it is mainly affected by Jinzhong Driving School.

  Business analysis: (1) Beijing Headquarters: We judge that the company ‘s enrollment performance has been affected by the release of Beijing ‘s demographic dividend in the past two years, and the population easing policy has affected the improvement of admissions performance.Mainly come from carts and motorcycles; (2) Expansion in different places: Beijing / Yunnan / Shijiazhuang / Jingzhou 2019 enrollment growth rate will be 10 respectively.

13% /-6.

87% / 1.

00% / 13.

06%, revenue growth was -2.

72% /-11.

13% / 36.

30% /-24.

79%; Shandong subsidiary started operations in the first half of the year, enrolling 635 students and earning 16.

580,000 yuan, Shandong Zibo Driving School is characterized by the company’s unique advantage in the examination room.

In our judgment, Yunnan and Shijiazhuang subsidiaries reduced losses from January to September; Wuhan subsidiaries are expected to open this year, and Chongqing subsidiaries are expected to open next year.

  The growth points of new business models that contribute to future achievements: (1) Aviation school: Eastern Fashion Airlines acquired 55% of Hairuo Tonghang in the first half of the year and developed pilot training. Currently it is mainly commercial licenses, and private license admissions will be launched next year; (2)VR intelligent driving training business: It can effectively reduce labor and energy costs, and the reorganization is conducive to the company’s breakthrough expansion. Currently, it has been expanded in urban areas such as Wangjing; (3) The main advantage of driving training is extended to the automotive aftermarket.

  Investment recommendations We judge that the growth rate of next year’s performance is expected to exceed one year. The main reasons are: (1) the cost reduction caused by VR; (2) the company’s bid for government procurement of test venue services will bring the company nearly 20 million yuan in revenue growth; (3)) Aviation school training, Shandong and Wuhan subsidiaries are expected to become new growth points, but may have little short-term profit contribution; (4) At present, some regions have successively introduced policies that require driving schools to have their own land to promote accelerated industry integration.

The company’s 19/20 / 21EPS is expected to be 0.



51 yuan, covering for the first time, give “overweight” rating.

Margin of safety refers to the increase in holding price range of 21 by major shareholders in July-September 2017.


33 yuan.

  Risk warnings increase the pressure on depreciation stalls; advancement of offsite 武汉夜生活网 projects is less than expected; systemic risks.