Net profit of Fumo in 2021 decreased 5.99% year on year, 1Q2022 net profit decreased by 46.61% year on year. On April 29, the company announced the 2021 annual report and the first quarter report of 2022:2021 achieved operating income of 2,566 million yuan, an increase of 10.93% over the previous year, and achieved net profit of 131 million yuan of Guimo, converted to fully diluted EPS of 0.09 yuan, a decrease of 5.99% from the previous year, and net profit of deducted Fumo was 113 million yuan, a decrease of 25.26% from the previous year.
1Q2022 achieved operating income of 646 million yuan, a decrease of 3.58% over the previous year, and achieved net profit of 60 million yuan, converted to fully diluted EPS of 0.04 yuan, a decrease of 46.61% over the previous year, and achieved net profit of 59 million yuan after deducting non-return to the mother, a decrease of 47.81% from the previous year.
The company's consolidated gross margin increased by 1.77 percentage points in 2021, and the cost rate for the period increased by 1.34 percentage points. The company's comprehensive gross margin in 2021 was 47.01%, up 1.77 percentage points from the previous year. 1Q2022's consolidated gross margin was 45.55%, down 6.78 percentage points from the previous year.
The company's expense ratio in 2021 was 52.79%, up 1.34 percentage points from the previous year. Among them, the sales/management/finance/R&D expenses ratio was 18.36%/21.59%/12.56%/0.28%, respectively, and the year-on-year changes of -1.80/+0.33/+3.06/-0.25 percentage points respectively. The 1Q2022 company's expense ratio for the period was 48.81%, up 2.75 percentage points from the previous year. Among them, the sales/management/finance/R&D expenses ratio was 13.32%/20.92%/14.43%/0.14%, respectively, with year-on-year changes of -2.35/ +2.38/+2.93/-0.21 percentage points respectively.
Continuing to expand the convenience store business and introduce new alcohol brands to push Gaohua's decline. In 2021, the company opened 25 new convenience stores and 1 Ole store. By the end of 2021, the company had opened 58 stores (including 42 convenience stores) in Hunan Province and Tianjin, including: 52 in downtown Changsha, Hunan (including 42 convenience stores); 5 in other cities in Hunan Province; and 1 in Tianjin. With the exception of 16 convenience stores, which are franchise stores, all stores are directly managed stores. In terms of brand introduction, in 2021, the company took Maotai Liquor as the core, and signed a number of alcohol brands one after another; pushed high-end cosmetics brands to sink to prefecture-level cities for the first time, and launched an advanced first store plan in the Dizhou market in Hunan.
Lower profit forecasts and maintain “buy” ratings
The company's performance fell short of expectations, mainly due to the impact of the epidemic. Given that there is still some uncertainty about the recovery process of the epidemic, we lowered the company's 2022/2023 EPS forecast by 70%/68% to 0.06/0.07 yuan, adding 0.07 yuan to the company's 2024 EPS forecast. The company continues to expand the convenience store business, continuously introduce new brands, increase user stickiness, and maintain its “buy” rating by less than 1 times.
Risk warning: Competition in the Hunan retail market has intensified, the cultivation period for new stores has been longer than expected, and the convenience store promotion process has fallen short of expectations.