Core ideas:
Sales fell again and the return on investment increased.
According to the first quarterly report of 2015 released by Guangbai shares, 1Q2015 achieved revenue of 1.94 billion yuan, down 4.39% from the same period last year, and net profit attributable to 72.44 million yuan or EPS=0.21 yuan, up 7.04% from the same period last year, mainly due to 16.44 million of securities investment income in the current period and 59.18 million yuan after deducting non-attributable net profit, down 12.66% from the same period last year. The decline in terminal sales has not changed significantly, and the rapid rise in expense rates is a drag on the company's performance. During the reporting period, the company's gross profit margin rose to 19.57 per cent year-on-year, and the rate of sales + administrative expenses rose 0.67pp to 14.06 per cent year-on-year.
Business outlook for 2015: the reform of state-owned enterprises will promote the new round of development of the company.
The company expects 1H2015 net profit to rise 0-20% year-on-year, and plans to achieve 7.725 billion yuan in main business income for the whole year, an increase of 3.72% over the same period last year, and a net profit of 246 million yuan, an increase of 3.36% year-on-year. The company's stores are actively adjusting to shopping centers and community retail formats (14 years, 1 year, 1 year, 13 years, 2 years). At the same time, through the establishment of small loan companies, participation in consumer finance companies, actively open up the space for the development of the main business. In addition, Guangbai Group, a major shareholder of Guangbai shares, has commercial resources such as 800000 party logistics base and 1 million party professional market. Under the guidance of state-owned assets securitization in Guangdong Province, asset restructuring, and expanding and strengthening local state-owned enterprises, the group is expected to inject high-quality assets into the company. It is expected to boost the company's new round of development.
Profit forecast and investment advice.
As the leading retail company in Guangdong, facing the increasingly severe competitive environment, the company actively adjusts its store opening strategy, reassembles the advantageous market in the province, and at the same time actively develops new businesses such as micro-loans and consumer finance. In the future, the company will promote the expansion of the chain and focus on digging new community retail projects in Guangzhou and Guangdong Province to achieve the landing of mergers and acquisitions. After Guangzhou Friendship has completed a major asset restructuring, the expectation of company reform is even stronger, the company is expected to receive high-quality asset injection from the parent company, and its competitiveness and profitability will be enhanced. It is estimated that the EPS of the company will be 0.72,0.78 yuan in 15-16 years, maintaining a "prudent increase".
Risk hint: terminal retail is significantly weak, and the progress of state-owned enterprise reform is not as expected.