Key points of investment
Efficiency improvements, steady progress, performance promotion effects are remarkable:
2022H1 achieved revenue of 46.031 billion yuan (YOY +17.36%), gross profit margin of 3.18%, net profit of 408 million yuan (yoy +34.09%), net profit of 384 million yuan (yoy +38.62%), net profit of non-homing mother of 384 million yuan (yoy +38.62%); single Q2 revenue of 220,018 million yuan (YOY +20.03%), gross profit of 3.24%, up 0.11 pct from the previous year; net profit of Guimo was 208 million yuan (yoy +41.09%), net profit of non-homo mother (yoy+) 37.55%). Faced with the comprehensive and complex impact of the epidemic, the industry and the international environment, the company made efforts on the cost side to speed up inventory turnover. Commodity inventories have been declining for two consecutive quarters since 2021Q4. The company's Q2 inventory was 2,574 billion yuan, a decrease of 15.12% over the previous month.
The “logistics+warehousing+retail” supply chain has been perfected, and the retail business has consolidated its position as a channel:
22H1's digital distribution business revenue was 32.145 billion yuan (YOY +14.54%), accounting for nearly 70% of revenue, with a gross profit margin of 2.78%; the digital retail business revenue was 13.803 billion yuan (yoy +24.21%), accounting for nearly 30% of revenue, with a gross profit margin of 3.55%. The company is committed to building transaction service capabilities for all types of e-commerce platforms and comprehensively promoting the upgrading of new retail strategies. Apple's channel scale has reached a new high. Currently, the company operates and manages more than 2,800 authorized Apple stores and outlets, and has opened up the joint operation of public and private traffic. As of 22H1, the total number of 2C orders of Coodoo has completed 4.19 million orders, an increase of 14% over the previous year. Honor is focusing on improving the quality of market operations, further expanding the business scale of incremental customers such as operators, government, and enterprises, and continuing to promote supply chain finance services, actively cooperating with Honor's O2O business layout to provide core support for Honor's O2O business layout.
Continuously optimize digital private domain operation capabilities, achieve breakthroughs in private brand building, and promote the upgrading of the company's industry:
With “content” + “social networking” as the core, the company has built a digital private domain operation capability integrating global operation, product inventory, precise marketing and service visualization to enhance the company's overall service quality and user stickiness. Relying on this, the company launched an FMCG sales and service network layout. At the same time, it also made a breakthrough in building and operating its own brand, which was recognized by the market. For example, the company's smart care product “ROZU/Rongzun” focuses on the marketing promotion and supply chain optimization of core products, and online sales have reached a new high; the smart health product “UOIN/ Pomelo Print” has now achieved profits and will continue to invest in research and development; the new tea brand “Cha Xiaokai” products under the participating subsidiary No.1 Machine Technology have covered 20,000 sales outlets.
Profit forecasting and valuation
As a leading digital distribution and digital retail service provider in China, ASD has significant competitive advantages in terms of sales network layout, product operation development, organizational efficiency improvement, and digital renewal support, which is the core reason we continue to be optimistic about the company. The company's revenue for 22/23/24 is estimated to be 1,144.65/1330.96/1,50939 billion yuan, up 20.4%/16.3%/13.4% year on year, net profit of 12.56/16.66/2,211 billion yuan, up 36.2%/32.7% year on year. The price-earnings ratio corresponding to the current market capitalization is 9.9X/7.4X/5.6X respectively, maintaining the “buy” rating.
Risk warning
The epidemic recurred; new product sales and expansion fell short of expectations; mobile phone sales fell short of expectations.