Matters: the company issued the 2019 annual report and the 20-year quarterly report. In 2019, the income was 4 billion yuan, an increase of 2.9%, and the net profit returned to the mother was 10 million yuan, an increase of 2.6%, and earnings per share was 0.03 yuan. 1Q20 realized income of 1.31 billion yuan, an increase of 10.1%, and net profit of 70 million yuan, an increase of 12.9%, or 0.22 yuan per share.
In 2019, the performance was stable and the growth of 1Q20 accelerated. In 1919, the revenue of the company's offline stores was 3.01 billion yuan, down 1.1%, joining revenue was 190 million yuan, up 9.4%, online was 520 million yuan, up 25.5%; the overall gross profit margin was 42.4%, which remained stable; at the end of 19, the company had a total of 2792 stores, with an increase of 95, including 2429 direct stores and 363 franchise stores, achieving steady expansion. 1Q20 actively responded to the epidemic and achieved an increase of 10.1% in revenue, with the fastest growth of online business; gross profit margin of 44.8%, up 0.5 pct; sales expense rate of 28.0%, 0.8pct of the same rise; management expense rate of 9.3%, a drop of 0.7 pct; and a net interest rate of 5.6%, a rise of 0.1pct, a significant improvement compared with the previous month.
The paid membership service was launched in April to transform into a full-ecological platform. With the upgrading of consumption in China, the growing middle class and the growing awareness of consumers to buy members for exclusive services, a new era of paid membership has come. Laifen caters to the market development trend by launching paid "black gold members" on April 17. Black gold members can enjoy year-round special discounts on shopping in app, Mini Program, h5 and offline stores (except special stores such as airport and railway station), as well as special services for members, to invigorate high-quality customers and further tap the significance of user value and increase consumption. Laifen intends to take paid members as the starting point to create a full ecological life service platform.
Innovate the strategic layout and turn to user thinking. In the new retail era, how to connect users has become the key to marketing. According to the "28 Law", 20% of super users contribute 80% of corporate profits, so how to win these 20% of high-quality users is the most important. The paid membership model represents that merchants shift from flow thinking to user thinking, from rapid customer growth thinking to in-depth customer retention thinking, the goal is to retain users to create greater value. Laifei is the first to launch the paid membership business and launch a strategic layout with user thinking as the core.
Long-term outlook, the company actively respond to market changes in adjustment and innovation, performance volume is just around the corner.
1. In the face of new consumption upgrading, the introduction of paid membership service will help to increase consumption. Laifen makes great efforts to develop paying members, invigorate high-quality users, and increase the purchase frequency of users so as to increase sales.
2. from chain stores to omni-channel, upgrade brand image in an all-round way. At present, the company has formed an omni-channel network system, such as direct stores, franchise stores, Tetong channels, e-commerce and Laifei APP platform, and continues to create an intelligent retail model. At the same time, innovate brand marketing strategy, comprehensively upgrade brand image, and improve customer recognition. 3. Offline direct operation and joining will go hand in hand to accelerate the process of nationalization. The company has about 2400 direct stores, and has accelerated the development of franchise stores since 18 years, focusing on North and South China. With the improvement of brand influence, the pace of store opening is expected to accelerate year by year. 4. Develop online channels to speed up product R & D and upgrading. The company has strengthened its online marketing. In the past 17-19 years, the average sales of the company's line increased rapidly last month, second only to three squirrels. At the same time, the company continues to enrich the product matrix, continue to cultivate large items, product structure continues to upgrade, to short-term protection, healthy development to meet diversified needs.
Profit forecast and investment advice: according to the psychology and needs of users at different stages, the company launches paid membership business to tap the value of high-quality customers and enhance customer loyalty and stickiness. We expect the company's net profit level to reach a new level in 21 years' time. We estimate that the income of the company in 20-22 years is 55.3,68.3 and 8.32 billion yuan respectively, the net profit is 1.3,2.2 and 340 million yuan respectively, and the EPS is 0.39,0.66,1.01 respectively. Compared with listed companies in the industry, the valuation of Laiyi in the past 20 years is on the low side. Q1 actively responds to double-digit growth, improves the certainty of annual performance, and is expected to enjoy the valuation premium. We give the 20-year PE 40 times, corresponding to the target price of 15.6 yuan, maintaining the "recommended" rating.
Risk tips: direct store rents and labor costs have risen sharply, the progress of joining has been lower than expected, online growth has slowed down, raw material prices have risen, food safety issues, and so on.