The readings of this report are as follows:
As the leader of supermarkets in Central and South China, the company continues to promote the regional layout, H1 digitization has achieved outstanding results, and the supermarket business has further expanded the consumer market, waiting for the performance to pick up.
Main points of investment:
Maintain and increase holdings. H1 revenue 7.31 billion yuan (- 14.1%), return to the mother net profit of 210 million yuan (+ 25.1%), deduction of-130 million yuan (- 19.7%), deduction is lower than previously expected, but taking into account the investment income thickening full-year profit, the forecast company's 2021-23 EPS to 0.25pm 0.29max 0.33 yuan (formerly 0.17pm 0.21x0.24 yuan) growth rate of 9715pm 13%. Maintain the target price of 9.23 yuan and maintain the increase of holdings.
Q2 declined significantly, and the gross profit margin of supermarkets decreased more. 1) the rapid growth of H1 home is due to the investment income from the completion of the issuance of the real estate asset securitization project in Jinxing Bubugao Plaza; however, the deduction is not due to the increase in the cost recognized by the implementation of the new lease standards, the increase in the promotion fee / start-up fee of the new store, and the impact of community group buying. 2) the growth rate of Q1/Q2 revenue is-8.5%, net profit is 3.3%, net profit growth rate is 3.3%, and the growth rate of Q2 is significantly lower than that of non-growth rate. 3) the gross profit margin of H1 wholesale and retail business is 19.3% (- 0.4pct), of which the supermarket is 15.9% (- 2.5pct), and the expense rate during the period is 31.6% (+ 6.1pct) mainly due to the increase in sales expenses. 4) H1 operating net cash flow 1.63 billion yuan (+ 118%); 5) H1 inventory turnover 56.6days / time (- 6.1days / time).
Digitization has achieved remarkable results. 1) as of the end of June, the total number of stores was 417, including 369 supermarkets / department stores (336 stores in Hunan province) and 15 new supermarkets / closed supermarkets in H1; 2) by the end of June, there were 371 stores (Better bought 371s / JD.com 234s / ele.me 325s / Meituan 260s / multi-outlets 6), self-service cashier stores 371, community-covered stores 374 3) H1 digital membership is 27.71 million, contributing sales account for 71.5% of total sales; online GMV is 3 billion yuan (3.35 billion yuan in the same period last year); 4) department store format strengthens digital operation and marketing innovation.
The format of the supermarket broadens the consumer market. 1) focus on the layout of new outlets and the development of new business models, and create a quality format that is more inclined to the post-8090 consumer groups; 2) pilot cooperation with JD.com for the full realization of the supermarket business system, to make up for the lack of online channels to lay a solid foundation. 3) strengthen member marketing, optimize self-owned traffic platform better purchase, realize non-food whole category management, continuously improve the framework of supply chain in Taiwan, and accelerate the transformation of digital operation; 4) buyback to enhance confidence.
Risk hints: the epidemic situation is repeated, regional expansion, digitization is not as expected, and so on.
