Main points of investment
Events: Cuiwei shares released its 2017 semi-annual report on Aug. 26. During the reporting period, the company's operating income was 100 million yuan, down 6.08% from the same period last year; operating profit was 83.8223 million yuan, up 44.83% over the same period last year; its mother deducted non-net profit from 10,000 yuan, an increase of 43.37% over the same period last year; basic earnings per share are 0.11 yuan.
The level of revenue is stable and slightly reduced, and cost control is beginning to show results. During the reporting period, the company's revenue decreased by 6.08%, mainly due to the decrease in sales of goods closed in Qinghe store. Operating costs correspondingly decreased to 2.026 billion yuan, down from the same period last year. The gross profit margin is 19.88%, which is basically stable compared with the same period last year. The sales cost was 305 million yuan, down 13.40% from the same period last year, mainly due to the closing of Qinghe store and the expiration of real estate decoration and equipment depreciation in Dacheng store. The management fee was 10,000 yuan, down 17.35% from the same period last year, mainly due to the listing of fee-for-use taxes to "taxes and additions" and the closure of Qinghe store to reduce fees. Therefore, due to the reduction of costs and expenses, the end of the amortization period for the opening of Dacheng Road store, and other reasons, the level of net profit increased during the reporting period.
The consumer market environment has improved, the business planning has been reasonable, and the performance has gradually improved. The company is mainly engaged in commodity retail business, mainly to the department store industry, supermarkets, catering and other forms of cooperation to form a commercial chain. During the reporting period, the overall environment of the consumer market improved and the consumer confidence index rebounded. During this period, the company carried out the business dress adjustment of Peony Garden Store, Dacheng Road Store and Cuiwei Store. And carry out the introduction and opening of the new retail format "Box Ma Xiansheng" in Dacheng Road Store. Qinghe shop closure related to the termination of the contract, through the above measures, successfully reduce fees and losses, profits increased significantly compared with the same period last year. At the same time, carry out online and offline business integration, enhance customer experience, carry out omni-channel construction, promote Wechat Cuiwei purchasers online business development and mobile payment, independent cashier and other applications, speed up the process of member development and electronization, improve omni-channel service functions, and promote the growth of member sales and group purchase business.
The company's core competitiveness comes from geographical, brand and management advantages. The company has 7 Cuiwei stores (A, Block), Peony Garden Store, Longde Dian, Dacheng Road Store, Contemporary Mall Zhongguancun Store, Dingcheng Store and Ganjiakou Department Store in Beijing, with a total construction area of 402600 square meters. Cuiwei hundred Store Qinghe Store ceased operation in early 2017. The larger influence area and the centralized regional business model bring the company's brand location double advantages. At the same time, the company by improving the quality and efficiency of management. Continue to strengthen financial budget management and financial analysis, promote the management of gross profit margin and cost rate, and made progress in the management model.
Profit forecast and risk rating: the overall situation of the industry recovers. After business structure, layout and brand adjustment, optimize online business, the company's business profitability is strong. The improvement of online and offline sales chain will help the company to further expand its membership and membership sources, and expand regional influence. In view of the good development prospects, the annual EPS of the company is expected to be 0.25 USD 0.28pm 0.32 yuan respectively, corresponding to the current share price PE of 34-31-27 times, the first time to cover the "overweight" rating.
Risk hint: macroeconomic downturn and lower-than-expected consumer demand