Introduction to this report:
The steady increase in revenue and profit in Q1 shows the company's business resilience as a regional leader, accelerates the promotion of new business layouts such as new retail and smart homes, and is optimistic about improving the quality and efficiency of ecological thinking operations.
Key points of investment:
Maintain the increase in holdings. Q1 revenue was 391 million yuan/ +13.29%, net profit of the mother was 226 million yuan/ +33.53%, and net profit of 218 million yuan/+8.22% after deducting non-net profit was in line with previous expectations. The company maintained its forecast for 2022-24 EPS of 1.31/1.44/1.56 yuan, a growth rate of 7/10/ 8%, and maintained the target price of 15.72 yuan to maintain the increase in holdings.
Q1. Gross and net interest rates declined slightly, and operating cash flow increased slightly. 1) The reversal of earnings from changes in fair value is one of the reasons for the sharp increase in earnings. In the same period last year, -48 million yuan was due to large fluctuations in financial assets; after deduction, positive growth was maintained, showing operational resilience; 2) Q1 gross profit margin was 72.1% /-2.2 pct, net interest rate after deduction of 55.8% /-2.5pct; 3) Expense rate 4.8% /+1.2pct, where sales expenses ratio was 0.38% /+0.29pct, management expenses rate 4.45% /+0.63pct, financial expenses rate -230.0.02% /230.2% pct; 4) Net operating cash flow of RMB 210 million/ +3.9%.
Deeply cultivated in the southwest region has a strong competitive advantage, and the ecological thinking operation model helps enhance the synergies of various business formats. 1) The integration of the home building materials store industry is accelerating. The company has more than 1.1 million square meters of mature properties in Chengdu. Relying on the Chengdu furniture industry cluster, it implements efficient resource allocation, and continuously enhances the enterprise network effect by laying out supply chain finance, consumer finance services and related investments around the home furnishing industry; 2) Continuing to be optimistic about the ecological thinking and operation model, the nine major business formats will be linked.
Promote new retail and other business formats to create a second growth curve, and digital transformation and upgrading have been steady and steady. 1) Steadily develop new retail, art services, import and export businesses, and focus on building a second growth curve, with new retail business revenue exceeding 10 million yuan in 2021; 2) Cooperation+investment with dozens of leading smart home brands and platforms at home and abroad, continuing to promote smart home business, which is expected to benefit from the explosion of the industry; 3) Continue to implement digital upgrades of stores and focus on building smart stores to further empower operation management.
Risk warning: repeated epidemics, new retail promotion falls short of expectations, etc.
