BBK released its third quarterly report for 2021 on October 30th. In the first three quarters of 2021, the operating income was 10.47 billion yuan, down 13.87% from the same period last year; the net profit returned to the mother was 172 million yuan, up 1.77% from the same period last year, deducting the non-return net profit of-166 million yuan, down 221.56% from the same period last year. In the first three quarters, diluted earnings per share was 0.20 yuan, weighted average return on net assets was 2.42 percent, and net operating cash flow was 1.855 billion yuan, an increase of 71.07 percent over the same period last year.
Brief comments and investment suggestions.
1. Revenue in the third quarter fell 13.2% from a year earlier. The total operating income in the first three quarters was 10.544 billion yuan, of which operating income was 10.47 billion yuan, down 13.87% from the same period last year, and interest income was 73.82 million yuan. The total revenue in the third quarter was 3.186 billion yuan, down 13.20% from the same period last year. The decline in income is mainly due to the transformation of home appliance business from self-management to five-star joint venture, joint venture and rental since July 2020, the normalization of epidemic prevention and control and the impact of community group buying, and so on.
The comprehensive gross profit margin in the first three quarters was 32.03%, an increase of 2.64pct over the same period last year. Among them, the gross profit margin in the third quarter was 35.67%, an increase of 3.33pct over the same period last year. We estimate that the trend in the first half of the year will be mainly due to an increase in the share of income from other businesses.
two。 The expense rate increased by 4.2pct during the third quarter. The sales expense rate in the first three quarters was 26.33%, an increase of 3.72pct over the same period last year; the management expense rate was 2.53%, an increase of 0.32pct over the same period last year; the R & D expense rate was 0.20%, an increase of 0.03pct over the same period last year; the financial expense rate was 3.71%, an increase of 1.46pct over the same period last year; and the overall period expense rate was increased by 5.54pct to 32.77%. During the third quarter, the expense rate increased 4.23pct, in which the sales, management, R & D and financial expense rates increased by 2.60pct, 0.29pct, 0.06pct and 1.28pct, respectively.
3. The deduction of non-net profit fell by 3105% in the third quarter compared with the same period last year. The net profit of return to home in the first three quarters was 172 million yuan, up 1.77% from the same period last year, mainly due to the asset securitization of Bugao Plaza on Jinxing Road to achieve income from the disposal of non-current assets; deducting the non-return net profit of-166 million yuan, down 221.56% from the same period last year. Of this total, the return net profit in the third quarter was-35.69 million yuan, down-1262.80% from the same period last year, and the non-return net profit was-34.77 million yuan, down 3104.55% from the same period last year. The decrease in deduction of non-net profit is mainly due to the larger year-on-year increase in fees confirmed by the new lease criteria; the larger promotion investment in new stores and the preparation expenses are directly included in the current profit and loss; in addition, the decline in residents' desire for consumption under the epidemic and community group buying have an impact on the performance.
4. Operating cash flow increased by 71% in the first three quarters compared with the same period last year. The net operating cash flow in the first three quarters was 1.86 billion yuan, an increase of 71% over the same period last year, mainly due to the influence of supplier payment settlement time difference and new leasing standards. The net cash flow of fund-raising activities was-895 million yuan, down 863.6% from the same period last year, mainly due to the repayment of some loans and lease criteria.
5. It is planned to set up a trust to be listed in Singapore and a new exploration of commercial real estate financing. The company plans to use two commercial complexes in Hunan Province as underlying property assets to set up trusts in Singapore and list on the main board of the Singapore Stock Exchange. This new exploration of commercial real estate financing will help the company to broaden the financing platform, optimize the asset-liability structure, improve the operational efficiency of commercial real estate, and consolidate long-term development.
Maintain judgment of the company. Digital transformation and supply chain reform, focus on improving efficiency. ① strategic focus, regional advantages are significant:
The company ploughed Hunan / Guangxi / Jiangxi / Sichuan, spun off e-commerce and ineffective sideline since 2018, withdrew from the loss-making Chongqing market in 2020, continued to focus on advantageous areas and improve penetration. ② actively promotes digital transformation, with in-depth coordination across all channels: strategic cooperation between Tencent and JD.com, the results of digital transformation are gradually transformed into productivity, 1H2021 digital membership reaches 27.71 million, online GMV30 billion yuan; pilot cooperation with JD.com mother and child project, significantly increase items, online and offline the same price, to fully open the supermarket business system, make preparations for the whole online. ③ promotes the reform of the supply chain with fresh as the core, expands key categories and private brands, continuously improves the framework of the supply chain, and accelerates the transformation of digital operation.
Update the profit forecast. It is estimated that the net profit from 2021 to 2023 is 112 million yuan, 121 million yuan and 133 million yuan respectively, an increase of 0.4%, 7.5% and 10.6% over the same period last year. The current market capitalization corresponds to 51 times, 48 times and 43 times of PE from 2021 to 2023, and 0.42 times, 0.40 times and 0.37 times of PS respectively. With reference to the valuation of comparable companies, it is given a PS of 0.45-0.55 times in 2022, corresponding to a reasonable market capitalization range of 65.6-8.02 billion yuan and a reasonable price range of 7.60-9.29 yuan per share, giving an investment rating of "better than the market".
Risk hint. Industry competition intensifies, the progress of reducing losses in other provinces is uncertain, and the pressure on capital expenditure continues.