I. Overview of events
According to the 2016 annual report, the company achieved operating income of 2.101 billion yuan, an increase of 5.26% over the same period last year; net profit of 241 million yuan, down 4.61% from the same period last year; and earnings per share of 0.58 yuan. It is proposed to distribute a cash dividend of 3.60 yuan (including tax) for every 10 shares, for a total of 150 million yuan.
II. Analysis and judgment
The company actively promotes the brand adjustment and accurate marketing of its shopping malls, continuously optimizes the shopping experience of customers, and maintains a relatively stable level of performance. In 2016, Huihui Jinnan Station store is officially operated in the urban Olai mode, and the sales are good. In the future, various stores are expected to further improve the commodity structure, enhance the shopping environment, and strengthen marketing efforts, so as to enhance the ability to gather customers and promote performance growth. In addition, focusing on the strategy of self-brand and supply chain integration, the company has obtained the license of TONY WEAR trademark, and we believe that the company is expected to further develop its own brand and promote deep joint venture in the future.
Lay out new retail and actively promote channel integration
The E-MEC system developed by the company has completed the development, testing and launch of supplier promotion, electronic return and other modules. at present, it has been applied in Xuhui store and Hongqiao store of Huijin department store, realizing the uniqueness of the same SKU code between different stores. At the same time, "Huijin" APP, which is connected with the E-MEC system, was officially launched in July 2016, realizing the e-commerce shopping model, and supporting a variety of online and offline shopping scenarios such as code-scanning shopping and online shopping, forming an integrated sales model of "goods, inventory, promotion, membership, payment and settlement". We believe that in the future, the company will continue to improve the function of the E-MEC system, and gradually implement it to other stores, accelerate the coordinated development of online and offline, and build a new retail model based on omni-channel.
Cash flow is stable and high dividends are expected to continue.
The company's cash flow is stable and has maintained a high dividend since its listing. In the past five years, cash dividends have accounted for about 60% of the net profit returned to the mother, and the dividend yield has been among the highest in the industry in the past 12 months, and the high return to shareholders is expected to continue in the future. In addition, the company is ultimately controlled by Xuhui District SASAC. With the gradual deepening of the reform of state-owned enterprises in Shanghai, the development prospect of the company is worth looking forward to.
Third, profit forecast and investment suggestions
The company operates steadily, continues to promote online and offline integration, and is expected to increase efforts to expand a new retail model based on omni-channel in the future. It is estimated that in 2017-2019, the EPS is 0.64, 0.69, and 0.75 yuan, corresponding to PE, which is times that of 26-24-22, maintaining the "highly recommended" rating.
IV. Risk hints
The macroeconomic downturn has led to a downturn in consumption, and the progress of all-channel construction has fallen short of expectations.