> 2011 Autumn/Winter Season held in March 2011 -- confirmed sales order amounting to RMB550 million, of which about 24% are for ERATAT Premium products.
Sales is an increase of about 5% over 2010 autumn/winter season.
> The 2011 Season sales contribution by footwear and apparel will be about 35% and 65% respectively (2010 Season: 48% and 52% respectively).
This is expected to contribute positively to the overall gross profit and gross profit margin.
What do you guys think? Seems a bit low increase in sales. Cos of the fall in the no. of distributors. Will the remaining dozen distributors have the foundation to stay on>? The positive side is that the gross margin will definitely rise --- a. cos of the Premium products and b. cos of the change in prodt mix towards apparel.
It is important to watch if Eratat Premium is doing well because Eratat is moving in that direction. in April -June quarter, they announced RMB40m of Premium sales. This is small but it is a good start. This time, for July to Dec delivery, the order is RMB132m. The momentum seems to be there.
ethan999 says: Let's not forget that Eratat Premium is not exactly a complete breakaway from Eratat Classic.
One of the components within Eratat Classic used to be the Eratat 'Celebrity Series'. Given the popularity of that series, Eratat has decided to enhance its image using that series but marked in a more chic, up-market style in the form of Eratat Premium and if I'm not mistaken, the celebrity series has been removed from the Classic series as a result.
Therefore I think Eratat Classic orders could have decreased also partially due to a conversion of the celebrity series to Eratat Premium.
Anyway I think their Premium clothing look a lot better. I would buy them if they were selling in Singapore.
ethan999, are u sure they converted the Celebrity series to Premium? What was the Celeb series contributing in terms of % revenue?
Hi Dele,
I need to make a slight correction to that post as it is not the 'celebrity' series but the 'travel' series within Eratat Classic which has been discontinued. The Celebrity series was doing well according to CFO Ken Ho and they decided to build on that with a whole new Premium series which has a more 'euro-chic' style. You can find the information regarding this on page 3 of the following report by SIAS.
www.eratatgroup.com/v2/files/releases/20110405_sias.pdf
Nevertheless I was hoping that their order book will grow more this 2nd half of the year than it has. However it looks like they are focusing more on branding, pricing and increase margins rather than increasing volume right now.
Projections for 2h 2011
Actual sales typically turn out to be 5% higher than order book.
Estimated revenue for 2h 2011: 550 million + (5% of 550) = 578 million.
Composition: 65% Apparel, 35% Footwear.
Gross Margins for Apparel: 40% Gross Margins for Footwear: 25%
Estimated revenue from apparel = (65% of 578 million) = 375.7 million.
Estimated revenue from footwear = (35% of 578 million) = 202.3 million.
Estimated gross profit from apparel = (40% of 375.7 million) = 150.28 million
Estimated gross profit from footwear = (25% of 202.3 million) = 50.575 million
Total estimated gross profit for 2h 2011 = 150.28 million + 50.575 million = 200.86 million.
Looks very promising from a bottomline perspective but I hope they focus more on growing the topline as well in the months to come.
ABETTERSINGAPORE wrote: anyone confirms the money in their bank is really their money???
i worry that the trend of banks in china cahooting with the boss of many listed firms to state fake bank statement of the money that is supposed to be there.
why did eratat need to raise capital by issuing more share when it has so much already??
i probably will punt when it reaches 15c Joshua87: i believe eratat is nvr about the cash they have or not since it is only a small proportion compared to the current share price...
it's about whether they can grow their biz or not and if their transformation from a sports shoe company to a casual wear and probably premium wear is successful or not... they have only embarked on it last year and hence, investors will need a few more years to gain that extra confidence...
their latest order book seems to be below expectation and the 2 placements have caused the share price to overhang... but the cheap valuation of ard 2-3x PE is worth investing for the longer term...
if u are looking for cash company, Changtian is the one that u should look out for with cash per share of around 20cents and yet the share price is trading at ard 7cents+... this kind of company u shld really worry if the cash is really there or not...
Eratat's PE is actually 2.7 now, compared to Lilang's PE of 26.
Also, Lilang is trading at 6 times net asset value, compared to Eratat's <0.6 times.
However Lilang’s current net asset value is only about 2.45 times that of Eratat’s.
Furthermore, they aren't even that different in market size. Lilang's annual revenue of 2 billion rmb makes it only almost double that of Eratat's.
And even then, Lilang was already trading at around this price range a year ago when its revenue was about 1.5 billion rmb.
Eratat is currently valued at 85 million sgd while Lilang is at about the equivalent of 2.057 billion sgd, or about 24.2 times that of Eratat.
No doubt Lilang is currently worth more than Eratat, but 24.2 times?
Perhaps Eratat really needs to seek a dual listing in HK.
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