The company is an infrastructure provider and operator in the field of modern consumer and logistics with “commercial retail+warehousing logistics” as two-wheel drive. The company's commercial retail business is developing steadily, and the warehousing and logistics business is expected to grow rapidly over the next three years with the release of reserves.
“Commercial Retail+Warehouse Logistics” two-wheel drive. The company's main business is commercial retail and warehousing logistics, which accounted for 89% and 5% of revenue in 2021, respectively. Commercial retail: Develop and operate commercial assets in the core areas of target cities to create an integrated commercial lifestyle and consumption scenario. The business formats mainly include supermarkets, shopping malls, online cloud malls, etc. The business models include self-management, joint ventures, and leasing. Warehousing logistics: Focusing on the idea of asset-light operation, a closed loop operation model of “investment-build-recruitment-withhold-management” is adopted to achieve a closed loop of capital through investment, construction, operation, withdrawal and retention of management rights for various warehousing and logistics projects and rolling operations.
The company's warehousing and logistics business is expected to enter a fast track of development. On the industry side, demand for high-standard warehouses continues to grow: 1) downstream demand such as e-commerce and third-party logistics drives demand for modern warehousing logistics; 2) China's high-standard warehouses are low, and urban renewal and safety upgrades drive the continuous release of demand for high-standard warehouses; 3) the epidemic has changed consumption habits, and cold chain distribution such as fresh e-commerce has further released demand; 4) the importance of logistics has been highlighted, and policy support has been supported. As of 2021, the company has 1.84 million square meters of warehouse space, of which 420,000 square meters have been completed and 920,000 square meters are under construction. According to construction progress estimates, it is expected that incremental increases will continue to be released over the next three years, contributing rent income and investment income to the company. Meanwhile, the company is still actively seeking land acquisition opportunities.
Give the investment a “Highly Recommended - A” rating. We expect the company's net profit to be 260 million yuan, 290 million yuan and 320 million yuan respectively in 2022-24. Based on our profit forecast, the company's current stock price corresponds to 10 times 2022 EV/EBITDA and 15 times 2022 E P/E, which is equivalent to the current average value level of the retail industry; the average valuation of the logistics real estate industry is 16 times 2022 EV/EBITDA and 21 times 2022 E P/E, which is higher than the company's current valuation level, and the company's warehousing and logistics business has not been reflected in the valuation. Based on: 1) benefiting from downstream demand, warehousing logistics — especially demand for high-standard warehouses; 2) it is expected that the company's warehousing and logistics reserve area will be released in the next three years, and the company's warehousing and logistics business will enter a rapid development channel; 3) The company's valuation is expected to be close to the valuation of the logistics real estate industry, giving the company a “highly recommended -A” rating.
Risk warning: offline consumption falls short of expectations; demand for warehousing and logistics falls short of expectations; the release of the company's warehousing and logistics reserves falls short of expectations.