The company announced the "368" development strategy in the early stage, which mainly means: "3" means that the company will focus on developing the three main businesses of physical department stores, e-commerce and commercial property, while "6" and "8" are after six years of development. in 2015, the company's annual sales reached 8 billion, becoming a regional commercial leading enterprise. In the past, the growth of the company was slow due to the lack of clarity of strategy, and the average revenue growth rate in the past three years was only 12.8%. We believe that the proposal of the 368 strategy means that the company's road to self-development has been determined, which is worthy of recognition. L the space for the decline in expense rate large companies have a consolidated gross profit margin of 16.8% and a net profit rate of 1.4% in 2009. The high expense rate is a major problem for the company. The sales expense rate and management expense rate are at a higher level in the second-tier department stores. In the future, with the expansion of the company's business and income scale, the expense rate has a strong space to decline.

There are half of department stores and half of home appliances, and only Chaoyang stores make profits from the four stores.

In 2009, the company completed sales of 1.47 billion yuan (including tax 1.67 billion), an increase of 8.3 percent over the same period last year, and a net profit of 27.98 million, an increase of 13.9 percent over the same period last year. The income accounts for 51% of department stores, 47% of household appliances and 1.5% of supermarkets. The Chaoyang store with the best revenue and profit of the company has an income of about 1.2 billion yuan, the turf efficiency is 30, 000 / square meter, and the overall average turf efficiency of the company is 17000 / square meter. The company's Yulin store will be able to reverse its losses next year, and the adjustment of Wuxiang store and Guigang store is expected to take time. At present, the competition of Nanning department store is still insufficient, there is a lack of big brands, and there is more room for growth. The company is expected to add two new department stores in 2011, expanding the operating area of 60, 000 to 70, 000 square meters.

Risk hint: store expansion and improvement do not meet expectations; regional competition intensifies.

Pay attention to the company's development process and give it a "neutral" rating.

The transfer of subordinate companies contributed 66 million of the net profit in the medium term. The diluted EPS from 2010 to 2012 is RMB 0.35,0.16 and RMB 0.22 (corresponding to the total equity of RMB 260 million), and the PE from 2011 to 2012 is 73 times and 53 times, respectively. The valuation is on the high side, so we give it a "neutral" rating for the first time. However, considering many factors, such as the increasing clarity of the company's strategy and the improvement of management, the expectation of additional stores in the future, and the local development that ASEAN will promote, the company is expected to have a qualitative change and improvement. at present, the shareholding proportion of state-owned assets is only 23.81%, and it is possible to increase the shareholding in the future. Investors are advised to pay attention to the future changes of the company.