Maintain and increase holdings. In 2022, the revenue was 141.4 billion yuan /-8.9%, the return net profit was 749 million yuan /-63.4%, and the deduction of non-616 million yuan /-62.8% was lower than expected, mainly due to the disturbance of the epidemic / weak terminal consumption, and so on. If we add back the impact of rent reduction, the deduction will be reduced to about-41%. Considering that it will take a certain time for business to recover, the forecast EPS for 2023-24 will be reduced to 0.32 RMB 0.42 yuan (formerly 0.41 base yuan 0.48 yuan) with a growth rate of 84%. It is predicted that EPS will grow by 14% at 0.48 yuan in 2025, and the target price will be lowered to RMB 6.4 to maintain an increase in holdings.

Q4 is under pressure, and the reduction of cost rate reflects reducing cost and increasing efficiency. 1) Q4 has a revenue of 3.65 billion yuan /-12.1%, the net profit of-569 million yuan is larger than that of 2021Q4, and the profit and loss of non-504 million yuan is lower than expected; 2) the gross profit margin of 58.4%/-3.3pct, of which the gross profit margin of self-operation and leasing is 73.2% Accord 3.9pctscape 3) expense rate 37.7%/-4.7pct, in which sales expense rate 11%/-2.3pct and management 10.3%/-3.1pct 4) operating net cash flow of 3.88 billion yuan /-27.9%, mainly due to reduction and delay in the collection of rent and management fees; 5) debt ratio 55.5%/-1.9pct, interest-bearing debt reduced by 5.1 billion yuan, interest-bearing debt ratio 27.5%/-2.6pct.

Continue to expand the sinking market, REITs New deal is expected to benefit. 1) by the end of 2022, there were 94 self-management, 284 household management, 8 strategic cooperation and 57 franchises, with a rental rate of 85.2% and 86.7%. (2) the policy clearly mentioned supporting the issuance of consumer infrastructure REITs, and the company's self-property is located in the core area (more than 80% in first-and second-tier cities) and its high area (self-operating area is about 8.37 million square meters) is expected to fully benefit. 3) the entrusted shopping malls are well prepared, of which 315 contracted projects have obtained land use right certificates / plots, which is expected to speed up the pace of development.

Create multi-industry integration of consumption, promote online and offline integration. 1) continue to promote the strategic landing of one province and one benchmarking shopping mall, select 32 No.1 stores, 9 supreme MALL and 59 benchmarking shopping malls, and accelerate the construction of benchmarking shopping malls; 2) increase the national food and beverage market coverage from 32% to 43% in 2022, and increase the catering coverage of 100 mall shopping malls from 55% to 78%. 3) jointly explore the layout of new home retail areas with war investment BABA, and take the lead in implementing a new online and offline integrated retail model.

Risk tips: offline passenger flow recovery is not as expected, real estate regulation and control, etc.