Roley's Home Textile -- "Golden Ten Years"

　　 Luo Lai Home textiles 002293 textile and apparel industry tax changes led to 09 and 10 years of a quarterly supplementary payment enterprise Income tax It has little impact on net profit, EPS decreased by 5% in 09 years after adjustment, and EPS in the first quarter of 10 decreased by 3%.

Originally, the company enjoyed preferential income tax rate of 20% and 22% in 09-10. Now it needs to declare according to the unified income tax rate of 25%, and retroactively adjust the 09 and 10 year first quarter results. It is estimated that the increase in corporate tax rates in the 09 and 10 quarters of the year will result in an increase of 7 million 500 thousand yuan and 1 million 230 thousand yuan in the cost of corporate income tax, which will reduce EPS by about 5% and 3% respectively. We expect that the adjusted 09-12 EPS will be 1.03/1/38/1.84/2.34 yuan (originally 1.08/1.42/1.87/2.34), which has little effect on the net profit of 09 and 10 years, with a drop of 5%.

As the base number of EPS declined in 09 years, the growth rate in 10 years to 09 years increased from 31.5% to 34%.

In the long run, it is still optimistic about the future development of home textile industry and the rapid growth of Roley home textiles. Although the adjustment of income tax rate reduced EPS by 3% in 2010, it did not affect our judgment of the fundamentals of the company.

Home textile industry entry brand With the development of "golden ten years", as a leading industry in the industry, Luo Lai home textile can win faster growth than the industry's average growth rate based on its brand, marketing and channel advantages. We expect the company to achieve a compound growth rate of 22.5% and a compound profit growth rate of 31.5% net profit in 09-12. From the valuation point of view, after 10-12 years of adjustment, EPS is 1.38/1.84/2.34 yuan, corresponding to 10-12 years PE is 39/29/23 times, and the short-term valuation is relatively high. But considering its industry space and rapid growth, it is still optimistic about the company in the long run.

Risk: the weather is too late this summer, which has some influence on the mat and summer sales; the reduction of real estate volume may have a lagging effect on home textile terminal sales.

But the rapid expansion of stores will make up for the impact of Ping effects on revenues.