Investment events:
The company announced its annual report: sales revenue in 2012 was 2.642 billion yuan, an increase of 14.84 percent over the same period last year; net profit attributed to listed companies was 64 million yuan, an increase of 10.42 percent over the same period last year, and earnings per share was 0.12 yuan; the distribution scheme is 0.36 yuan (including tax) in cash dividends for every 10 shares.
Main points of the report:
The 2012 performance is in line with expectations. The company's 12-year revenue scale and net profit level are in line with our expectations. Sales revenue slightly exceeded expectations, mainly due to the strong discount promotion in the peak season at the end of the year, with sales revenue reaching the best level in history of 794 million yuan in the fourth quarter; the net profit was slightly lower than expected, mainly due to the transfer of the construction of the New World store to current expenses in the fourth quarter, resulting in a 39% increase in management expenses compared with the same period last year, and the net profit was only 16 million yuan of 67% in the same period of 11 years.
The extension expansion promotes the steady growth of the performance in the past 13 years. The company's WTO West City project has been completed in 12 years and opened in 13 years, adding 50, 000 square meters of commercial property to the company and covering the business circle of Nanning University District. In addition, according to the "lease contract" signed between the company and the Nanning Federation of Trade unions, the negative first to fourth floors of the buildings marked inside the Cultural Palace compound at 20 Democratic Road in Nanning will be delivered to the company in the third quarter of 13 years, adding 43,000 square meters of commercial property to the company.
The company's e-commerce is expected to become a new fulcrum for the company's growth. The company's Meimei e-commerce platform has been launched, mainly engaged in household appliances and food supplies, forming the extension and complementarity of department stores. At present, the company has attracted Hisense and Changhong to open flagship stores on its e-commerce platform. With the good distribution system in Nanning and the long-term accumulation of department stores, the company's e-commerce platform is expected to achieve rapid development based on Nanning and towards Guangxi.
The impact of large e-commerce enterprises on traditional retail is still fermenting. Domestic large e-commerce businesses such as BABA Group, JD.com, SUNING, Yi Xun and No. 1 store have first-mover advantages such as website construction, distribution system and consumer awareness, and the sales substitution for traditional retailing is evolving.
Profit forecast and valuation. Considering the certainty of the company's 13-year extension expansion, the 13-15-year EPS is 0.15, 0.18, 0.21 yuan, upgraded to overweight, and the target price is 5.40 yuan.