The company's revenue in 2018 decreased by 0.15% compared with the same period last year, and its net profit increased by 12.73% compared with the same period last year.
The company announced its 2018 annual report: the operating income was 9.154 billion yuan, down 0.15% from the same period last year; the net profit returned to the mother was 295 million yuan, equivalent to 0.40 yuan in fully diluted EPS, an increase of 12.73% over the same period last year; and the net profit from non-return was 151 million yuan, down 39.12% from the same period last year. The performance is in line with expectations. The increase in the company's net profit is partly due to the investment income brought about by the sale of some shares of Jiangsu Cable and Jiangsu Bank. In a single quarter, 4Q2018 achieved operating income of 2.394 billion yuan, a decrease of 11.84% over the same period last year; net profit of 53.49 million yuan, an increase of 5.36% over the same period last year; and deduction of non-return net profit of-70.7 million yuan.
The comprehensive gross profit margin decreased by 0.25 percentage points, and the expense rate increased by 1.0 percentage points during the period.
The company's comprehensive gross profit margin in 2018 was 12.38%, down 0.25 percentage points from the same period last year. In 2018, the company's expense rate during the period was 9.82%, an increase of 1.00% over the same period last year, of which the sales / management / financial expense rate was 4.37%, 5.06% and 0.39%, respectively, up 0.47% / 0.43% 0.10% over the same period last year. The increase in the rate of sales and management expenses is mainly due to the increase in staff salaries and promotion expenses.
Revenue from department stores is declining, and car business is dragged down by sluggish new car sales.
During the reporting period, the revenue side of the company's main business was relatively flat: revenue from department stores / cars / catering and food business changed by-2.7% / 0.1% /-7.08 percentage points compared with the same period last year. Among them, the department store business is subject to the decline of the market influence of single stores, and the depressed performance is expected to continue in the near future. The auto business is affected by the downturn in new car sales, but there is still broad room for growth in used car business and integrated maintenance business.
Downgrade profit forecast and maintain "overweight" rating
The performance of the company's revenue side is lacklustre, which has a certain negative impact on the future business performance. We have reduced our forecast of fully diluted EPS for 19-20 years to 0.37 yuan 0.40 yuan (previously 0.60 / 0.63 yuan), and added a forecast of 0.43 yuan for 21 years. The company's PE (2019E) 14x, significantly lower than the average of the past three years (20X), maintains the "overweight" rating.
Risk hint: the automobile business is lower than expected, and the performance of middle and high-end department stores is lower than expected.
