Main points of investment:

The company announced its quarterly report of 2022, which exceeded expectations. In the first quarter of 2022, the company achieved operating income of 24.047 billion yuan, an increase of 15.32% over the same period last year, a net profit of 201 million yuan, an increase of 27.54%, and a non-net profit of 198 million yuan, an increase of 39.64% over the same period last year. The double improvement of revenue scale and profitability is mainly due to the continuous expansion of sales scale brought about by the implementation of the company's multi-channel and multi-brand strategy.

The margin of cost control is improving, and it is optimistic that profitability will continue to improve. The company's gross profit margin in the first quarter of 2022 was 3.11%, an increase in 0.32pct compared with the same period last year. In the first quarter of 2022, the company's period expense rate was 1.72%, an increase of 0.09pct compared with the same period last year, in which the sales / management / R & D / financial expense rate changed + 0.13/-0.12/+0.00/+0.07pct, respectively, among which the increase in sales expense rate was mainly due to the expansion of sales scale and the increase in market activities and personnel investment in order to open up overseas markets and build new retail operation capacity. The increase in the financial expense rate is mainly due to the increase in loan interest expenses and discount interest payments. in addition, due to the decrease in structural deposit income compared with the same period in 21 years, the investment income in the first quarter was 7.74 million yuan, down 35.28% from the same period last year. Under the combined influence, 22Q1 achieved a net profit margin of 0.84%, year-on-year + 0.08pct. After deducting the impact of investment income, the non-net profit margin of home deduction was 0.82% in the first quarter, an increase in 0.14pct compared with the same period last year. It is optimistic that the wine industry will continue to contribute investment income and strengthen the company's profitability for a long time.

Channel barriers enable cooperative brands to maximize value, and the upgrading of the new retail strategy accelerates business transformation. At present, the company has built a digital sales service network in 3C digital and fast consumer areas, with industry-leading user, data and commodity connection capabilities, as well as increasing end-to-end full-scene sales service capabilities. Well-known digital and fast consumer brands to strengthen cooperation with the company, with the help of mature channel system to enhance the value of the brand. At present, the company is the strategic partner of Apple Inc, Glory and Samsung to help mobile phone brands maximize product sales and win-win cooperation through the industry-leading omni-channel sales network. Among them, the company is the strategic investor with the largest shareholding proportion among the glory channel merchants, and we are optimistic that the two sides will cooperate closely to further expand the middle and high-end mobile phone market. In the new industry and new field, the company strengthens the strong alliance with Guizhou Zhenjiu, an excellent brand of liquor, and exclusively acts as the "Jinzhen 30" and "Jinzhen 15" layout liquor race track for mutual benefit; in the face of the opportunity of automobile intelligence, electrification and network connection, the company actively explores the new energy automobile track, gives full play to the advantages of national network, high-quality shopping mall resources and online and offline integration of new retail services, and lays out the future growth power. In 2022, the company released a new retail system 2.0, which takes consumers, e-commerce, online communities and offline stores as the matrix, digitalizes as the support, creates a new business scene of online and offline integration, and opens up the private domain flow pools of its industries to strengthen consumer operations. marks the company's upgrading from selling services to creating service value.

Maintain a "buy" rating. Focusing on 3C digital and FMCG distribution and retail, the company is a strategic partner of many excellent consumer brands at home and abroad. The digital global sales service network builds competition barriers, and the retail 2.0 system enables retail partners to achieve performance growth. It is optimistic that the company will consolidate its core business and continue to achieve breakthroughs in new consumer tracks and overseas markets, and expand the incremental space for sustainable development. We maintain our profit forecast and expect the company's EPS for 22-24 to be 0.93, 1.15, 1.44 yuan, respectively, corresponding to PE of 8-6-5, maintaining a "buy" rating.

Risk tips: mobile phone sales did not meet expectations; the epidemic repeatedly affected offline business; new brand expansion did not meet expectations.