Core ideas:
The optimization and adjustment of the network has taken effect, and the main business of the department store has picked up.
The company's 2014 revenue reached 7.646 billion yuan, down 1.48% from the same period last year, and its net profit was 238 million yuan or EPS=0.7 yuan, an increase of 7.25% over the same period last year, mainly due to an increase of about 40 million in investment income. Of this total, 4Q14's single-quarter revenue was 2.205 billion yuan, up 5.04% from the same period last year, but the gross profit margin continued to decline to 16.37%; the closure of inefficient stores led to a decline in sales + management expenses 0.66pp to 12.27% compared with the same period last year; and the attributable net profit was 74 million yuan, up 4.1% from the same period last year. Throughout the year, the company expanded 18000 square meters of Kaiping new Daxin department store, closed down Huizhou Guangbai, and held hands with BABA to launch "Guangbaibao" to promote the development of O2O model, optimize the network and keep close to the changes in consumer demand.
Business outlook for 2015: the reform of state-owned enterprises promotes a new round of development of the company
The company plans to achieve 7.725 billion yuan in main business income in 2015, an increase of 3.72 percent over the same period last year, and a net profit of 246 million yuan, an increase of 3.36 percent over the same period last year. The company's stores are actively adjusting to shopping centers and community retail formats; at the same time, through the establishment of small loan companies, shares 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 more than 10 billion property resources in commerce, exhibition and logistics. Under the guidance of state-owned securitization in Guangdong Province and the expansion and strengthening of local state-owned enterprises, the group is expected to inject high-quality unlisted assets into the company. It is expected to boost the company's new round of development.
Profit forecast and investment suggestion
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 predicted that the EPS of the company will be 0.72,0.78 yuan in 15-16 years, maintaining a "cautious increase".
Risk hint: terminal retail is significantly weak and the progress of state-owned enterprise reform is not up to expectations.