Event
The company released its 2022Q1 quarterly report, with revenue of 858 million yuan, down 60.02% from the same period last year, and net profit of 57 million yuan, down 46.95% from the same period last year, with basic earnings per share of 0.07 yuan per share.
The retail business of department stores is growing steadily, and the performance of medical business is outstanding.
The decline in 2022Q1's annual revenue is mainly due to the spin-off of the company's larger auto sales business in September 2021. From a business point of view, under the influence of unfavorable factors such as limited passenger flow caused by epidemic control and upgrading, 2022Q1 department store retail business takes consumer experience as the core, improves the mix of categories that meet the needs of the customer group, and continues to promote the landing of Xintuo brand, head brand and differentiated brand, achieving revenue of 207 million yuan, an increase of 2.22% over the same period last year. Revenue of catering and food sales business reached 67 million yuan, down 9.50% from the same period last year. The revenue of medical services reached 564 million yuan, accounting for 52% of the total revenue in 2021.
Explore and optimize the chain joining model to expand the business of food + convenience stores
Food business: Sanfengqiao Food, guided by the direct chain, set up a franchise system to accelerate the layout of cooked food chains in Jiangsu Province. 2022Q1 signed a contract to open 9 stores and 4 new stores. As of 2022Q1, there were 46 Sanfengqiao food stores. Convenience store business: the company has won the operation right of 7-Eleven in Hubei. 7-Eleven has opened a dense store in the joining mode, continuously improving profitability through efficient supply chain management, rich products and intimate and convenient services, and sustained and rapid development in the world. With the help of 7-Eleven Group empowerment, the company has continuously optimized the joining model, and achieved rapid development in Hubei. 2022Q1 signed a contract to open 4 stores as of 2022Q1. There are 21 stores in total.
The national chain layout of the medical plate is expected to extend the upstream and downstream medical industry.
National chain layout: the Department of Pediatrics of Jian Gao focuses on the diagnosis and treatment of "full development" of children and adolescents. As of 2022Q1, 16 growth and development clinics have been set up in Beijing, Shanghai, Hangzhou and other cities. Yahn Health is committed to providing personalized behavioral and psychological training and intervention for children with language disorders, growth retardation and autism spectrum disorders. As of 2022Q1, 15 service centers have been set up in 7 major cities, including Beijing, Shanghai, Hangzhou and Nanjing. Development plan: in 2022, the medical and health business will continue to promote strategic investment mergers and acquisitions with pediatrics and orthopaedics as the main track and medical service institutions as the core, and build a "three-wheel" drive layout based on paediatrics, orthopaedics and financial investment. at the same time, extend the upstream and downstream enterprises to lay a solid foundation for building the company's future health service ecological chain.
Investment suggestion
In the short term, with the improvement of the epidemic, the commercial retail and food and catering sectors are expected to release performance flexibility; in the long run, the light luxury industry has broad market space, the company continues to adjust and upgrade to improve the efficiency of the flat, and the retail department store business is expected to achieve steady growth. The fresh distribution and convenience store industry ushered in new development opportunities under the catalysis of the epidemic. The company opened fresh and enhanced stores and won the 7-Eleven Hubei management right to explore and join the chain expansion model, which is expected to further strengthen the main retail business; the company acquires Jengao Medical, Shuyang Central Hospital and Yahn Health, and cuts into the field of health care, multi-track linkage empowerment, which is expected to become a new performance growth point. We estimate that the company's EPS in 2022-2024 will be 0.26,0.30,0.33 yuan per share respectively, and the corresponding share price PE will be 18,16,14 times respectively, maintaining a "buy" rating.
Risk hint
The epidemic situation in some areas is repeated; the expansion of 7-Eleven stores is not as expected; and the cultivation of the medical sector is not as expected.
