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华联综超(600361)中报点评:收入降幅有所收窄 后续关注盈利改善情况

中金公司 ·  Aug 29, 2018 00:00  · Researches

The results for the first half of 2018 were basically in line with expectations, and Hualian Comprehensive Super announced the results for the first half of 2018: operating income of 6.13 billion yuan, down 3.57% year on year; net profit attributable to the parent company was 42 million yuan, down 39% year on year (net profit after deducting non-net profit increased 687% year on year), corresponding to earnings of 0.06 yuan per share, which is basically in line with our expectations. On a quarterly basis, Q1/Q2 revenue was -3.4%/-3.8% yoy, respectively, and net profit was +853%/-83% yoy, respectively. Hualian's net operating cash flow for the first half of the year was 48 million yuan, up 138% year on year. Development trend 1. Revenue continued to be under pressure in the first half of the year, but the decline narrowed somewhat. Hualian Comprehensive Super's revenue for the first half of the year fell 3.6% year on year. Among them, the Q2 growth rate was 0.4 percentage points lower than Q1. The company opened 5 new stores and closed 1 store in the first half of the year. Facing an increasingly competitive trend in the industry, the company actively carried out category adjustments and optimized fresh food management. Although the revenue side still faced some growth pressure in the first half of the year, the decline was narrower compared to the same period last year (-5.36%) and the whole of last year (-4.85%), so we need to pay attention to its improvements in the future. 2. Gross margin declined slightly, and expenses were properly controlled. In the first half of the year, the overall gross margin of Hualian Super Market fell 0.1ppt to 21.5% year on year. Except for North China, where revenue was relatively high, remained flat year on year, all other regions showed varying degrees of decline. Among them, Northeast China and East China declined by 1.7ppt and 2.2ppt, respectively. The company's period expense ratio improved by 1ppt to 20.9% year over year, and sales/management/finance rates improved by 0.9/0.1/0.1ppt, respectively. In the first half of the year, Hualian Comprehensive confirmed investment income of 33 million yuan, a significant decrease from the same period last year (affected by asset sales, confirmed investment income of 332 million yuan). The company maintained a relatively healthy development trend after withholding non-net profit. 3. Focus on business format adjustments and profit improvement trends. Facing an increasingly competitive pattern in the industry, Hualian Super Market actively explored the integration of popular catering formats in the first half of the year and focused on developing community lifestyle supermarkets. In the future, we can focus on improvements in its main business. Earnings Forecast We have maintained our earnings per share forecast for the full year 2018/2019. Valuation and recommendations Currently, the company's stock price corresponds to 38.3/38.2 times P/E in 2018/2019. We maintain a neutral rating and target price of RMB 4.70, which is 17.21% higher than the current stock price. Corresponds to 2019 45 times P/E. Risk consumption is weak; market competition is intensifying.

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