The company announced on July 25 that the company has submitted an application for duty-free qualification for relevant stores to Fujian Province and Fuzhou Municipal Government, Gansu Province and Lanzhou Municipal Government. At the same time, all the company's Dong Jian Gao personnel, the company's controlling shareholder Fujian Fengqi Investment Co., Ltd. and its concerted actor, Mr. Shi Zhangfeng, confirmed that there were no plans to reduce their holdings in the next 12 months.
The demand for tax-free consumption in China is obvious, and South Korea still has a lot of room for development. In 1919, China's luxury goods market was worth US $122.5 billion, accounting for 35 per cent of the world, with strong demand, but about 70 per cent of consumption took place overseas. In 1919, the scale of China's duty-free market was 54.5 billion yuan, compared with the Korean tax-free market of about 150 billion yuan, the Chinese market has not yet been effectively developed. It is expected that with the improvement of consumption level and domestic policy support, China's duty-free market will continue to grow high, and the scale is expected to surpass that of South Korea in the medium term.
Fujian has strong consumption power, Gansu is outstanding in the northwest belt, and the scale of the duty-free market in the two places is considerable. In 1919, Fujian's social zero totaled 1.57 trillion yuan, with a relatively high growth rate, ranking fifth in the per capita level, with the basis for the development of the duty-free market. Although the consumption level of Gansu is limited, it has certain advantages in traveling all over the provinces and cities. at the same time, it is relatively concentrated in the province, with Lanzhou accounting for 39.4%.
Based on the calculation of the proportion of total social zero, the scale of duty-free market in Fujian and Gansu in 19 years is nearly 2.1 billion yuan and 500 million yuan respectively.
Dongbai deep ploughing Fuzhou, Lanzhou, tax-free industry under the limited competition, duty-free business is expected to greatly improve the company's profit level. If Dongbai successfully obtains a duty-free license, combined with the relatively blank duty-free market in and around the two provinces, the relatively high proportion of provincial capitals, and the local competitive advantage of Dongbai (Fuzhou accounts for 50%), Dongbai is expected to achieve 80% of the market share. Achieve tax-free business income of about 2 billion yuan. For the leading enterprises in the tax-free industry, China is exempt from the net interest rate of 11.29% in 19 years, and the tax-free business income is expected to contribute 232 million yuan to the net profit. In 1919, Dongbai Group returned to its mother with a net profit of 330 million yuan.
Investment suggestion: Dongbai is mainly engaged in commercial retail and warehousing and logistics business, in which commercial retail business is stable and improving, Fuzhou has a stable market position, Lanzhou project development space is large; the scale of warehousing and logistics business is growing rapidly, and the 22-year development and management scale is expected to exceed 5 million square meters, and obviously benefit from the promotion of REITs. The replacement value of the company's main assets is about 12.204 billion yuan, with a market capitalization of 5.174 billion yuan on July 24. In 20-22, the estimated EPS is 0.42,0.60 and 0.92 yuan respectively (excluding tax-exempt business), and the corresponding PE is 13.63,9.56,6.28 times respectively. We are firmly optimistic about the development of the company.
Risk hints: retail market demand has dropped sharply, logistics market demand has dropped sharply, logistics land supply has been substantially tightened, and property value has decreased.