Description of the event
The company disclosed its quarterly report: In 2023Q1, the company achieved operating income of 3.51 billion yuan, an increase of 1.94% over the previous year, achieved vested net profit of 1.54 million yuan, an increase of 425% over the previous year, and achieved attributable non-net profit of 9.44 million yuan, an increase of 249% over the previous year.
Incident comments
In a single quarter, the company achieved net profit returned to the mother in a single quarter for the first time since the second quarter of last year, mainly due to stable gross margin and fine management on the cost side. The 2023Q1 company's operating revenue was 3.51 billion yuan, a year-on-year increase of 1.94%, a slight increase over the previous month. The gross margin remained flat, the sales expenses ratio increased 0.1 percentage points year on year, and the gross sales spread remained stable in the first quarter. It is expected that the company's price strategy and marketing promotion efforts will be relatively stable, the management expenses ratio will increase 0.04 percentage points year on year, the R&D expenses rate will decrease 0.05 percentage points year on year, and the financial expense ratio decreased 0.33 percentage points year on year. Taken together, the company's net profit of 2023Q1 will reach 1.54 million yuan, a year-on-year increase of 1.54 million yuan, a year-on-year increase 425%, the first net profit returned to the mother after three consecutive quarters since 2022Q2. The net profit attributable after deducting non-net profit was 9.44 million yuan, an increase of 249% over the previous year.
Looking ahead to the whole year, the company will actively promote supply chain system optimization, promote digital construction to enhance efficiency, enhance endogenous operation efficiency, and accelerate omni-channel business development and network development on this basis. Looking ahead to 2023, the company will continue to strengthen the strategy of endogenous operating efficiency optimization and strengthen product benchmarking and efficiency assessment. At present, the supply chain optimization process is getting better. In 2022, the product update rate for the warehouse supermarket business reached 39.45%; the product update rate for the community supermarket business reached 27.36%; the update rate for fresh food products in convenience stores reached 120.34%, and the room temperature product update rate reached 54.5%. In addition, the company completed the construction of the first phase of the data center project, achieved optimization such as standardization of product management, automation of self-operated investment quotations, etc., and developed the supply chain management system in the direction of high efficiency and low cost. In addition, the company is expected to seize the dividends of offline recovery and obtain incremental dividends from offline recovery. In addition, it will launch a higher quality network layout in Hubei Province in 2023, accelerate the expansion of the Hunan market, take the opportunity to launch network planning for the Henan market, and is expected to add 300 new commercial outlets throughout the year, including 100 warehousing supermarkets and 200 convenience stores; in addition, the company will promote omni-channel business development plans and accelerate plans for omni-channel business development Build an online business platform, create a new model for online and offline integrated development, build an “X+1+N” online platform matrix, and build your own omni-channel e-commerce platform.
Investment suggestions: The company turned losses into profits in a single quarter, and supply chain optimization showed remarkable results. Looking forward to the future, the company will seize consumer recovery dividends and actively expand the Hubei and Hunan markets, take the opportunity to launch the Hebei market network plan, and promote online and offline integration to achieve an omni-channel strategic layout. There is still room for growth. In the medium to long term, the company actively promotes digital transformation and supply chain optimization to optimize endogenous retail efficiency. It is expected that 2023-2025 EPS will be 0.0, 0.06 and 0.14 yuan respectively, maintaining the “buy” rating.
Risk warning
1. The acceleration of new entrants to the regional market further intensifies competition; 2. The company's new business format layout and operating results are slow to be realized.