The company's 1-3Q2017 revenue decreased by 5.75% compared with the same period last year, and its net profit increased by 29.19% compared with the same period last year.
On October 28, the company announced that 1-3Q2017 achieved operating income of 3.661 billion yuan, a decrease of 5.75% over the same period last year, and a net profit of 74 million yuan, equivalent to a fully diluted EPS of 0.14 yuan, an increase of 29.19% over the same period last year. The net profit of non-return was 68 million yuan, an increase of 42.64% over the same period last year, and the performance was basically in line with expectations. Judging from the split in a single quarter, the company's 3Q2017 achieved operating income of 1.132 billion yuan, a decrease of 5.01% over the same period last year, which was less than the 5.85% decline in 2Q2017. 3Q2017 realized a net profit of 14 million yuan, an increase of 25.44% over the same period last year, which was less than that of 2Q2017.
The comprehensive gross profit margin decreased by 0.03 percentage points, and the expense rate decreased by 1.30 percentage points.
From January 3, 2017, the lease contract of Qinghe store was terminated and the number of department stores decreased to 7, with a total construction area of 402600 square meters, including 194, 000 square meters of self-owned property and 2086, 000 square meters of leased property. The main business income of 1H2017 Company was 3.568 billion yuan, down 5.56% from the same period last year. From the perspective of different business formats, the operating income of the company's commodity sales / leasing business was 3.485 billion yuan, respectively, a decrease of 5.32% / 14.95% / compared with the same period last year. The comprehensive gross profit margin of 1-3Q2017 was 20.00%, down 0.03% from the same period last year, and the expense rate during the company period was 16.18%, down 1.30% from the same period last year. Among them, the sales / management / financial expense rate was 12.64% / 3.48% / 0.06%, respectively, down 0.59 / 0.50 / 0.22 percentage points from the same period last year.
The effect of reducing fees and losses has been shown, and diversified development has been gradually promoted.
In 2017, the company continued to promote the adjustment of business structure, layout and brand, carried out the adjustment of Peony Garden Store, Dacheng Road Store and Cuiwei Store, the termination of contracts related to the closure of Qinghe Store, and the placement of merchants and personnel were completed, and the effect of fee reduction and loss reduction was shown. In recent years, the company has tried to extend to the areas of service consumption such as education, culture and tourism through investment. In July 2016, the company signed a "Cooperation School Agreement" with Beijing Haidian State-owned assets Investment and Management Co., Ltd., Beijing Daoqin Investment Management Co., Ltd., and jointly invested in the establishment of Beijing Haidian International Education Investment Co., Ltd., with a shareholding ratio of 15%.
Downgrade profit forecast and maintain "overweight" rating
In 2017, the company effectively reduced fees and losses by closing loss-making stores, but considering that the company's revenue was still in the decline stage, we downgraded the company's fully diluted EPS forecast for 2017-2019 to 0.25 / 0.28 / 0.29 yuan (previously 0.29 / 0.31 / 0.33 yuan), maintaining the "overweight" rating.
Risk hint: the effect of store adjustment is not as expected, and the recovery of middle and high-end consumption is not as expected.