The company's revenue in 2018 decreased by 22.27% compared with the same period last year, and its net profit increased by 5.89% compared with the same period last year.
On March 30, the company announced its 2018 annual report that its revenue in 2018 was 2.997 billion yuan, down 22.27% from the same period last year. This is mainly due to the adjustment of the shop sales policy of the Lanzhou International Trade Center project, and the company's commercial real estate business revenue decreased by 70.02% compared with the same period last year. In 2018, the net profit of returning to the mother was 262 million yuan, equivalent to 0.29 yuan of fully diluted EPS, an increase of 5.89 percent over the same period last year, and the net profit of non-return was deducted from 260 million yuan, an increase of 4.27 percent over the same period last year. According to the split in a single quarter, 4Q2018's revenue decreased by 2.05% from the same period last year, which was 26.58% lower than that of 3Q2018, and the net profit of 4Q2018 increased by 103.46% compared with the same period last year. The performance exceeded expectations, mainly due to the transfer of 80% equity in Foshan Ruiyou, a wholly-owned subsidiary, and 4Q2018 recognized an investment income of 226 million yuan (recognized as recurrent income).
The gross profit margin fell by 4.64 percentage points in 2018, and the expense rate increased by 5.88 percentage points during the period.
In 2018, the company's comprehensive gross profit margin was 22.11%, down 4.64 percentage points from the same period last year, of which the gross profit margin of the retail business was 17.81%, up 0.49 percentage points from the same period last year. In 2018, the company's period expense rate was 14.40%, an increase of 5.88% over the same period last year, while 4Q2018's period expense rate increased by 3.43% over the same period last year. The increase in the rate of sales and administrative expenses is mainly due to the opening of new stores in the retail business, and the increase in the rate of financial expenses is mainly due to the increase in the size of loans.
The retail business has recovered significantly, and the operation of the new project is expected to bring a large increase.
In terms of retail business, in the second half of 2018, Hall An and B of Fuzhou Dongbai Center reopened, and Hall C was put into operation. The entire Dongbai Center has a construction area of about 150000 square meters, which is located in the "Dongjiekou-three lanes and Seven lanes" tourism and cultural business circle in the center of Fuzhou. the geographical location is superior. Dongbai Sports Life City, Dongbaiyongjia Tiandi Store partially opened, Lanzhou Center trial opening. In 2018, the company's retail business achieved revenue of 1.892 billion yuan, an increase of 49.60% over the same period last year, and revenue of comparable stores in department stores in Fuzhou increased by 55.43%. The construction area of Lanzhou Center is about 200000 square meters, which is expected to bring great increment to the company's retail business.
Maintain profit forecast and maintain "overweight" rating
The company's retail business has recovered significantly, and the operation of the new project is expected to bring greater increment. We maintain the forecast for the company's fully diluted EPS from 2019 to 2020, which is 0.09 / 0.10 yuan, respectively, and the new forecast for the company's 2021 EPS is 0.11 yuan. The company's PE and PB are at historic lows and maintain the "overweight" rating.
Risk Tip: retail business recovery did not meet expectations, Lanzhou Center project operation did not meet expectations.