The company's revenue in 2018 increased 1.28% year on year, and Guimu's net profit increased 10.03% year on year
On the evening of March 14, the company announced its 2018 annual report: it achieved operating income of 13.105 billion yuan in 2018, an increase of 1.28% over the previous year; realized net profit of 1,205 million yuan, an increase of 10.03% over the previous year, converted to fully diluted EPS of 0.70 yuan; and realized net profit after deducting non-return mother's net profit of 1,093 million yuan, an increase of 40.01% over the contract. Looking at a single-quarter split, 4Q2018 achieved operating income of 4,533 billion yuan, an increase of 2.63% over the previous year, and achieved net profit of 464 million yuan to the mother, a decrease of 10.30% over the previous year. The performance was in line with expectations. The company plans to distribute a cash dividend of 1 yuan for every 10 shares.
The consolidated gross margin increased by 2.13 percentage points, and the cost ratio for the period decreased by 0.69 percentage points
The company's consolidated gross margin in 2018 was 29.26%, up 2.13 percentage points from the previous year. Among them, gross margins for main business/other businesses reached 22.68%/10.94% respectively, up 1.33/ 0.88 percentage points from the previous year.
The company's expense ratio in 2018 was 14.36%, down 0.69 percentage points from the same period of the previous year. Among them, the sales/management/finance expenses ratio was 9.14%/2.70%/2.53%, respectively, a change of -0.45/ -0.15/-0.09 percentage points over the same period of the previous year.
The restructuring of stores was carried out in an orderly manner, and the main retail business showed differences in regions and business formats
During the reporting period, the company completed the merger of Chongqing Maoye and Taizhou 100, and closed a store in Baotou, Wenjiang, Longquan, and Wuhou. By the end of the reporting period, the company had 34 stores in various business categories. The revenue side of the company's retail business was weak in 2018: department store/supermarket/Ole business revenue changed -2.30%/-18.32%/-0.42% respectively, while shopping malls performed better, with revenue increasing by 14.85%. Regionally, South China performed better than other regions, but the retail business as a whole is still weakening, dragging down the company's revenue side performance.
Maintain profit forecasts and maintain “increase holdings” ratings
We expect that with the restructuring of the company's retail business and the gradual completion of the integration of acquired stores, the company's performance will steadily improve. We maintain the company's overall EPS dilution forecast of 0.73/0.76 yuan in 19-20, adding 0.79 yuan for 21 years. The company's PE and PB are both at a low level in the industry, maintaining an “increase in holdings” rating.
Risk warning: The growth rate of the regional economy fell short of expectations, and the integration of acquired stores fell short of expectations.
