The company released its quarterly report for 2015 on April 21. In the first quarter of 2015, the operating income was 1.941 billion yuan, down 4.39% from the same period last year, the total profit was 94.19 million yuan, up 8.15% from the same period last year, and the attributable net profit was 72.44 million yuan, up 7.04% from the same period last year. The non-net profit was 59.18 million yuan, down 12.66% from the same period last year. Diluted earnings per share of 0.212 yuan, operating cash flow per share-0.46 yuan.
The company also expects that the attributable net profit in the first half of 2015 will increase by 0-20% compared with the same period last year, reaching 119 million to 143 million yuan, or 0.35-0.42 yuan for EPS.
Brief comments and investment suggestions.
The company achieved 1.941 billion yuan in revenue in the first quarter, down 4.39% from the same period last year, mainly due to the weak consumption situation and competitive pressure, but also in line with the overall situation of the industry. The gross profit margin in the first quarter increased by 0.42 percentage points from the same period last year to 19.57%, which may be related to the change in category structure and the strengthening of supply chain management. Although the amount of sales management expenses increased by only 1.11 million yuan, the rate of expenses increased by 0.67 percent to 14.06 percent due to the decline in revenue; the financial expenses increased by 4.9 million yuan (while 1Q14 still had a financial income of 350000 yuan), and the expense rate increased by 0.25 percent, which led to an increase of 0.92 percent to 14.3 percent during the period.
The fair value change income of securities investment increased by 21.7 million yuan, driving the operating profit to increase by 8.07% compared with the same period last year, and the final attributable net profit increased by 7.04% to 72.44 million yuan, while the non-net profit decreased by 12.66% compared with the same period last year, reflecting that the company is still under operating pressure.
The judgment of the company. (a) looking ahead to 2015-2016, the company's performance is expected to maintain steady growth of 5-10 per cent as the economic environment stabilizes, corporate showroom slows, and investment income contributed by wealth management products and microloans. (B) Guangzhou SASAC holds 54.18% of the company through Guangbai Group, and the Guangzhou Friendship Reform Plan has been introduced. If the reform of state-owned assets in Guangzhou is further promoted, Guangbai, which is expected to be in a competitive field, is expected to become the target of promotion and achieve performance improvement after the optimization of governance incentive structure.
(C) in its 2014 report, the company has put forward the 2015 development strategy: "expand innovative investment, accelerate the integration of mergers and acquisitions in the industry, continue to deepen the development of regional chains, and promote the great-leap-forward development of enterprises with the help of extensional growth; actively apply Internet technology, speed up the development of smart business, fully realize online and offline integration, and strive to develop new e-commerce businesses. Continue to improve the ability of marketing innovation and integration, take the initiative to explore buyer-made management, enrich store experience elements, and promote the sustainable development of the company. "
Update the profit forecast. It is estimated that the company's EPS from 2015 to 2017 will be 0.73,0.79 and 0.89 yuan respectively, up 4.52%, 8.2% and 12.71% over the same period last year. The company's current stock price is 16.39 yuan, corresponding to 22.5,20.8 and 18.5 times of PE from 2015 to 2017, respectively, which is lower than the industry average. Give a 12-month target price of 18.18 yuan (corresponding to 25 times PE in 2015) to maintain the "overweight" rating.
Risk and uncertainty. The regional consumption environment is still in the doldrums and the competitive pressure is increasing; the effect of new business development and the progress of business transformation are lower than expected; if the company has unconventional store expansion, it will break the matching of income and expenses and bring greater cost pressure in the short term.
