The current situation of the company
The company's recent acquisition of Beijing Baihaoji Community Department Store helps to enrich the layout of the company's community retail business. however, due to the slowdown in consumption growth, increased competition in the industry, e-commerce impact and other factors, we expect that the company will still face pressure in its short-term operation. follow-up still need to pay attention to the improvement of the main business of the company's supermarket.
Comment
1. Short-term operation is still under pressure. Due to the slowdown in consumption growth, increased competition in the industry, e-commerce diversion and other factors, we expect the company's revenue growth will still be under pressure in the short term. At the same time, the sale of Hualian boutique subsidiary in 2017 reduced the number of stores, which also had a negative impact on the company's performance growth. From a regional point of view, the operating data of the first three quarters show that the performance of central and southwest China is relatively excellent, partly driven by the opening of new stores, but the supermarket plate in East China is still facing greater downward pressure.
2. Pay attention to the improvement of the main business of the supermarket. At the present stage, the company steadily promotes store expansion on the basis of ensuring business quality; at the same time, the store level carries out a series of business improvement measures, including enhancing the replenishment capacity of best-selling products and eliminating low-sales products, strengthen the operation and control of fresh and other high-quality goods, and the strengthening of operation management is expected to increase store sales, but we still need to pay attention to the pace and pace of improvement in the main business. In addition, in terms of new retail and innovative business, the company has actively introduced various settlement methods, such as Wechat, Alipay, JD.com and self-service checkout, and increased its e-members to enhance user stickiness and improve user experience.
3. Focus on the main business and enrich the retail format of the community. From 2017 to 2018, the company successively transferred 100% equity of Hualian boutique subsidiary to 294 million yuan and 70% equity of Shaanxi agricultural fruit subsidiary to 1.2318 million yuan, narrowing the range of performance loss. In the second half of 2018, the company successively acquired 100% equity interest in Jiangsu Zijin Hualian Commercial facilities Operation Company for 236 million yuan (the listed company leased the property held by Jiangsu Zijin for operating comprehensive supermarkets). Acquire 100% equity interest in Beijing Baihaoji Community Department Store with 208 million yuan (operating 3 community department stores, the revenue / net profit in 2017 is 380 million yuan / 20.79 million yuan respectively) And then enrich the community retail business, and is expected to contribute to the company's performance.
Valuation proposal
Keep the 2018Lex19e profit forecast 0.09pm 0.08 yuan / share unchanged, and introduce 2020e profit forecast 0.10 yuan / share. The current share price maintains a neutral rating of 44 times 2020e, but the company's adjustment measures are expected to improve the main business, raising the target price by 10% to 4.3 yuan, corresponding to 43 times 2020e Phand E, with 3% room for decline.
Risk
Competition in the industry has intensified; labor and rental costs have continued to rise.