The company's 1-3Q2019 revenue increased by 13.29% compared with the same period last year, and its net profit decreased by 27.52% year-on-year.
Company 1-3Q2019 realized operating income of 9.399 billion yuan, an increase of 13.29% over the same period last year; realized net profit of 215 million yuan, equivalent to 0.25 yuan of fully diluted EPS, a decrease of 27.52% over the same period last year, a decrease of 39.49% less than that of 1H2019; and realized net profit of 171 million yuan of non-return, a decrease of 38.54% over the same period last year, which was less than the same decrease of 50.77% of 1H2019. The company's profit decline narrowed and its performance exceeded expectations.
In a single quarter, 3Q2019 achieved an operating income of 2.88 billion yuan, an increase of 7.76% over the same period last year, a net profit of 45 million yuan, an increase of 182.67%, and a non-return net profit of 43 million yuan, an increase of 128.22% over the same period last year.
The comprehensive gross profit margin increased by 1.27 percentage points, and the expense rate increased by 3.32 percentage points during the period.
The comprehensive gross profit margin of 1-3Q2019 was 23.47%, up 1.27% from the same period last year.
The expense rate for the period of 1-3Q2019 company was 19.46%, an increase of 3.32% over the same period last year, of which the sales / management / financial expense rate was 11.80%, 6.62% and 1.04% respectively, with a change of 0.91% 1.95max 0.46%, respectively.
In the era of Liqun, the loss narrowed, and the level of gross profit in East China increased.
By the end of the reporting period, the company had 86 large retail stores, 57 convenience stores and 9 "Fuji Farm" fresh community stores. The East China Liqun era stores acquired by the company have a short opening time and are still in the stage of market cultivation, and the related cultivation costs are relatively large, resulting in a certain loss. However, the loss has been greatly narrowed, as of the end of the third quarter, some stores in the profit group era have made a profit. The gross profit margin of East China also rose from 10.33% of 1H2019 to 14.24% of 1-3Q2019.
Raise profit forecast and maintain "overweight" rating
Considering that the rate of loss reduction in the Liqun era is faster than we expected, and the company's cost-side pressure is expected to slow down, we raise our forecast for the company's fully diluted EPS in 19-21 to 0.29 / 0.32 / 0.36 yuan (previously 0.21 / 0.21 / 0.23 yuan), and the company's cross-regional business process is steadily advancing to maintain the "overweight" rating.
Risk Tips:
The integration of acquired stores did not meet expectations, and competition in the regional retail market intensified.
