In 2010, the company achieved operating income of 1.857 billion yuan, an increase of 26.1% over the same period last year; operating profit of 114 million yuan, an increase of 190.7% over the same period last year; net profit belonging to the parent company was 98 million yuan, an increase of 239.46% over the same period last year; and basic earnings per share was 0.37 yuan, basically in line with expectations.
The company's revenue in 2010 was 26.1%, the highest growth rate in nearly three years. The main reasons for revenue growth: on the one hand, the company carries out large-scale business layout and brand adjustment of the department store, which is conducive to income growth; on the other hand, with the recovery of the economy, the income has increased, among which, the wholesale business of home appliances has increased significantly. The company's comprehensive gross profit margin is 16.63%, which is 0.2% lower than that in 2009, and its profitability is slightly lower. During the reporting period, the net income of the company's investment was 78.41 million yuan, accounting for 80.33% of the net profit attributed to the owner of the parent company in the current period. This is mainly due to the transfer of 51% of the equity of Beihai Wuxiang Real Estate Development Co., Ltd., withdrawing 87.4 million yuan.
During this period, the ability of cost control has been weakened. During the period of the company, the expense rate was 14.1%, an increase of 0.6% over the same period last year, of which the sales expense rate, management expense rate and financial expense rate were 4.1%, 9.8% and 0.2% respectively, the sales expense rate increased by 1%, and the management expense rate decreased by 0.3%. The financial expense rate decreased by 0.1 percentage point.
Regional leader, steady growth in performance. The company is currently the largest commercial retail enterprise in Guangxi, mainly operating department stores and under the jurisdiction of 7 shopping malls. The company adjusts the structure of the three direct stores to optimize the brand structure and expand the operating area, on the basis of which the company's performance will grow steadily.
A private offering will boost the development of the company. In December 2010, the company purchased commercial real estate on the 1st-2nd floor of Block An of Urban Construction World Trade Plaza, and recently issued a non-public IPO notice, through non-public issuance, purchase 3-5 floors of Block An and 1-5 floors of Block B of "Urban Construction World Trade Plaza" to open new stores. The company plans to issue no more than 80 million shares in a non-public offering at a price of 8.26 yuan per share, and intends to raise no more than 706 million yuan for the purchase of the above-mentioned real estate. The company plans to open a new store with an area of about 56000 square meters, with dense surrounding colleges and universities, many medium-and high-grade buildings, convenient transportation and broad market prospects. The company plans to adopt the business model of "joint venture + self-management" to operate the project, build a high-quality shopping center, and provide one-stop consumer services such as department stores, home appliances, supermarkets, catering and entertainment. If the private offering is completed in 2011, the new store is expected to break even in early 2013. In the short term, there is a risk of a decline in corporate profitability. It is estimated that the operating income of the new store will reach 350 million yuan in the first year of opening, and will increase at an annual rate of 20% in the following 3-5 years. It is estimated that after the break-even period, the EPS can be increased to 0.05 yuan per year.
Earnings forecast and investment rating: excluding diluted earnings from non-public offerings, the company is expected to achieve earnings per share of 0.20 yuan and 0.24 yuan respectively from 2011 to 2012, with a corresponding dynamic price-to-earnings ratio of 50 times and 42 times respectively according to the closing price of 9.98 yuan on February 16. the valuation of the company is on the high side and maintains a "neutral" rating.
Risk hint: the risk of approval of non-public offerings; the schedule of new projects is slower than expected risks.