Collis (603808): The acquisition of the remaining equity in IRO will gradually accelerate the opening of stores in the future

Collis (603808): The 北京夜网 acquisition of the remaining equity in IRO will gradually accelerate the opening of stores in the future

Event Summary: The company announced that it will acquire a 43% stake in ADON WORLD SAS (IRO parent company) from ELYONE SARL through its wholly-owned subsidiary Dongming International Investment (Hong Kong) Co., Ltd. for its own funds and self-raised funds of 89.5 million Euros.After the completion of the transaction, the company will indirectly hold 100% equity of ADONWORLD SAS.

Analysis and judgment: IRO is a French designer brand. As of 19H, there are 53 stores worldwide, including 18 in China.

ADON WORLD’s net profit for the first half of 2019 was 4,205.

RMB 690,000, assuming a maximum net profit of 0.

8.4 billion yuan, we estimate that this acquisition deducted about 19 non-PE.

3 times, which is higher than the current company’s own estimate, but the EBITDA is within 10 times, which is basically equivalent to the previous estimate of the acquisition of international brands.

According to our analysis, the significance of the acquisition of the company lies in: (1) After the acquisition, IRO’s domestic store opening has gradually accelerated.

In 2013, 2018, and the first half of 2019, the number of IRO domestic stores was 1, 13, and 18 respectively; after the completion of the acquisition, we judge that IRO’s store opening is expected to accelerate in the future, and from the experience of international brands opening stores in China, IROStore space is around 200.

(2) After the acquisition, overseas business is expected to expand and expand.

The company is expected to increase the management of IRO’s overseas distribution and wholesale business, and accelerate the expansion of IRO’s global business by integrating resources and improving teams.

(3) After the acquisition, IRO is expected to become the company’s overseas expansion platform, and it is expected to form synergy with overseas R & D centers in the future.

Investment suggestion: Expect the company 19 / 20EPS to be 1.

30/1.

60 yuan, corresponding growth rate of 18% / 23%, currently only 19 / 20PE is only 13/11 times, considering that the company is expected to accelerate next year (main brand accelerated store opening, EH brand resumed growth after destocking, IRO acquired the remaining equity and consolidated +Accelerating store opening), covering for the first time, giving “overweight” rating and target price of 20.

27 yuan (corresponding to 15 times of 19 years of main business + 20 times of Baiqiu Network).

Uncertainty in filing or approving risk alerts; risks previously expected to open a store; high inventory risks;