The company's 1Q2023 revenue decreased 5.18% year on year, and Guimu's net profit increased 62.32% year on April 28. On April 28, the company announced the first quarter report of 2023:1Q2023 achieved operating revenue of 1,642 million yuan, a decrease of 5.18% over the previous year, and achieved net profit of 93 million yuan in Guimu, which was converted into fully diluted EPS of 0.18 yuan, an increase of 62.32% over the previous year, and achieved net profit of 86 million yuan after deducting Fangmu's net profit of 86 million yuan, an increase of 94.93% over the previous year.
The company's consolidated gross margin for 1Q2023 increased by 2.80 percentage points, and the cost rate for the period decreased by 0.10 percentage points. 1Q2023's comprehensive gross margin was 39.61%, up 2.80 percentage points from the previous year.
The 1Q2023 company's expense ratio for the period was 29.24%, down 0.10 percentage points from the previous year. Among them, the sales/management/finance/R&D expenses ratio was 21.69%/2.98%/4.38%/0.20%, respectively, which changed +0.23/+0.20/-0.73/+0.20 percentage points from the previous year.
The profit margin level has improved markedly. The product and brand structure have been continuously optimized. 1Q2023 opened a new store, closed one store in April 2023, and is expected to open a new store in May 2023. The company's revenue declined year on year in 1Q2023, but there was a good year-on-year increase in profit. By business format, the company's shopping malls recovered the best. 1Q2023 shopping mall revenue increased 1.32% year on year, and gross margin increased 1.31 percentage points year on year. Mainly because the company actively adjusted its product structure in 2022, raised the gross margin level of its various business categories, while controlling expenses to reduce costs and increase efficiency, further increasing the company's profit margin level.
In 2022, the company's supermarket business increased the introduction and marketing of prepared dishes by integrating the supply chain and R&D orders for large individual products, and relied on its own processing in offline stores to launch ready-to-eat products, the 100 purchasing business increased the allocation of high-end high-quality brands such as international luxury products and cosmetics, introduced a number of first stores and flagship stores in the city in Shandong, strengthened the first store effect, and increased the introduction of supporting brands such as catering, entertainment, parent-child, etc. In cost control, the company strengthened rigid budget management and cost control, while promoting digital transformation and upgrading, strengthened independent development and construction of information management systems such as automated financial reconciliation platforms and asset management, upgraded the online expense reimbursement system, and launched an electronic signature system, thereby improving management efficiency.
Raise profit forecasts and maintain the “increase in holdings” rating
The company's profit performance for the first quarter of 2023 exceeded our previous expectations, mainly due to the company's active adjustments and continuous improvement in profit margin levels. We raised the company's 2023/2024/2025 EPS forecast by 76%/87%/109% to 0.10/ 0.12/0.14 yuan. The company optimizes product brand allocation, relies on digital systems to enhance operation and management efficiency, increase cost control, and maintain “increase holdings” ratings.
Risk warning: Some store leases cannot be renewed when they expire, and the pace of new business formats and new store expansion falls short of expectations.