Скачать презентацию DECEMBER 10 2013 Qianwen Wu Wenqiang Xu Yi Скачать презентацию DECEMBER 10 2013 Qianwen Wu Wenqiang Xu Yi

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DECEMBER 10, 2013 Qianwen Wu, Wenqiang Xu, Yi Liu and Zuowei Xu DECEMBER 10, 2013 Qianwen Wu, Wenqiang Xu, Yi Liu and Zuowei Xu

Agenda Introduction Macroeconomic Outlook Industry Overview Company Overview Financial Analysis Valuation Recommendation Agenda Introduction Macroeconomic Outlook Industry Overview Company Overview Financial Analysis Valuation Recommendation

Introduction q q Started as a health food store in 1935 A leading global Introduction q q Started as a health food store in 1935 A leading global specialty retailer of health and wellness products: vitamins, minerals and sports nutrition products. 8100 locations in the United States and 54 international countries Listed on April 1 st, 2011 and has already returned far more cash to shareholders than it raised in IPO Industry: Nutritional Supplements Industry Source: Company overview, GNC website

Macroeconomic Outlook Population over 50 and older Nutrition Supplement Disposable income q CCI Consumer Macroeconomic Outlook Population over 50 and older Nutrition Supplement Disposable income q CCI Consumer Confidence Index is a good indicator for the future consumption of nutrition supplement. The index soars above expectations came in at 82. 5, beating the forecast of 76. 0 in December.

Macroeconomic Outlook Source: 2010 Census Summary, U. S. Census Bureau Macroeconomic Outlook Source: 2010 Census Summary, U. S. Census Bureau

Macroeconomic Outlook Disposable income has been increasing from 9, 800 to 11, 600 for Macroeconomic Outlook Disposable income has been increasing from 9, 800 to 11, 600 for the past ten years. q q a Source: 2013 research. Stlouisfed. org

Nutritional Supplements Industry Key Statistics: Market size: 35 billion Annual growth: 5. 7% for Nutritional Supplements Industry Key Statistics: Market size: 35 billion Annual growth: 5. 7% for 2008 -2013 Source: Nutrition Business Journal

Nutritional Supplements Industry Target Consumers: q According to the National Health and Nutrition Examination Nutritional Supplements Industry Target Consumers: q According to the National Health and Nutrition Examination Survey, more than 50% of adults are taking a dietary supplement and 35% use a multivitamin product q According to the IBIS World, older white women with higher education levels, lower BMIs, and higher physical activity levels are the most likely consumer to using a supplement. Source: Nutrition Business Journal

Nutritional Supplements Industry Key to Success: Stock New Products Brand Availability Nutritional Supplements Industry Key to Success: Stock New Products Brand Availability

Industry Forces Analysis Buyers: High New Entrants: Median Rivalry: High Suppliers: Low Substitutes: Low Industry Forces Analysis Buyers: High New Entrants: Median Rivalry: High Suppliers: Low Substitutes: Low

Industry Forces Analysis Bargaining Power of Suppliers: Low Bargaining Power of Buyers: HIGH The Industry Forces Analysis Bargaining Power of Suppliers: Low Bargaining Power of Buyers: HIGH The raw materials has no product differentiation, which is a competitive market. . The industry is fragmented and consumers have a lot choice to choose. Threat of New Entrants: MEDIUM The steady revenue growth attracts lots of investors. New regulation imposed by the Food and Drug Administration(FDA)

Industry Forces Analysis Threat of Substitutes: Low The consumers rely heavily on the nutrition Industry Forces Analysis Threat of Substitutes: Low The consumers rely heavily on the nutrition products regularly to keep fit. Rivalry among Competitors: HIGH Price-based competition plays a significant role in vitamin and mineral supplements Competitive and fragmented industry. The four largest nutrition supplement company only cover 15% market share.

Company Overview 2. 58 bn 264. 80 m 2007 6. 00 k Revenue in Company Overview 2. 58 bn 264. 80 m 2007 6. 00 k Revenue in USD (TTM) Net income in USD Incorporated Employees Mergers & Acquisitions Acquired company: A 1 Sports Ltd Deal status: Completed Date: 02 Oct 2013 GNC: NYQ since announced: +4. 71% Source: 2012 10 k Page 7 • Global specialty retailer of health and wellness products • Three segments: Retail, Franchise and Manufacturing • Franchise stores are located in the United States and 54 international countries • Manufactures the majority of its branded products, but also merchandises various third-party products. • It sells products through a worldwide network of more than 8, 100 locations

Revenue by Segment/Product Revenue by Segment U. S. Retail Revenue by Product* includes domestic Revenue by Segment/Product Revenue by Segment U. S. Retail Revenue by Product* includes domestic retail and GNC. com, but excludes Lucky. Vitamin. co Source: 2012 10 k Page 8

SWOT Analysis Strengths Weaknesses - - Leading Market Position Broad Product Offerings Multi-channel business SWOT Analysis Strengths Weaknesses - - Leading Market Position Broad Product Offerings Multi-channel business model Reliance on Domestic Market Legal Proceedings High indebtedness Opportunities Threats - Increasing online spending in the US - Strategic Agreements - Increasing obesity among Americans - Increasing Competitive Pressures Uncertain R&D Outcomes Stringent regulations Increasing labor costs in the US

Company News GNC has linked a 15 -year lease on 342, 000 square feet Company News GNC has linked a 15 -year lease on 342, 000 square feet in a 600, 000 -square-foot warehouseand-distribution center in Anson business park. GNC Holdings, Inc. Announces $500 million Share Repurchase Authorization, Term Loan increase and repricing. Source: Indianapolis Business Journal Reaffirms its decision to develop a speculative building Reaffirms its commitment to consistently return capital to shareholders Reinforces its confidence in the fundamental strength and longterm prospects of the business

Management Outlook World-class management team with a proven track record. Highly experienced and talented Management Outlook World-class management team with a proven track record. Highly experienced and talented management team has a unique combination of leadership and experience across the retail industry. Team has successfully executed on key growth initiatives while effectively managing the business in a difficult economic environment. Source: 2012 10 k Page 7

Financial Analysis • Healthy ratios • Steadily improving profitability • High operating leverage NOTE: Financial Analysis • Healthy ratios • Steadily improving profitability • High operating leverage NOTE: The years above refer to the fiscal years ending on Dec 31

Financial Analysis • Healthy and improving ratios NOTE: The years above refer to the Financial Analysis • Healthy and improving ratios NOTE: The years above refer to the fiscal years ending on Dec 31

Comparable Companies Source: Yahoo Finance Comparable Companies Source: Yahoo Finance

Stock Performance Source: Yahoo Finance Stock Performance Source: Yahoo Finance

Stock Performance Source: Yahoo Finance Stock Performance Source: Yahoo Finance

Discount Rate Source: Yahoo Finance Discount Rate Source: Yahoo Finance

DCF Analysis DCF Analysis

Decision Drivers Strengths Leading market position (10 times larger store base than 2 nd Decision Drivers Strengths Leading market position (10 times larger store base than 2 nd player) New product line potential (sports nutrition, pet, etc. ) High operating leverage with certain top line growth International expansion potential Concerns Stringent regulation Price competition Quickly changing consumer behavior

Recommendation Valuation Summary Current price: $58. 16 DCF result: $66. 10 Comps result: $60. Recommendation Valuation Summary Current price: $58. 16 DCF result: $66. 10 Comps result: $60. 76 Recommendation: Buy 100 shares at market, with an estimated total cost of $5816

Questions? Questions?