The company's 1H2023 revenue increased 16.88% year on year, net profit increased 117.52% year on August 25. On August 25, the company announced the 2023 semi-annual report: 1H2023 achieved revenue of 420 million yuan, an increase of 16.88% over the previous year, and realized net profit of 52 million yuan, converted to a fully diluted EPS of 0.13 million yuan, an increase of 117.52% year on year, and achieved net profit of 52 million yuan, a year-on-year increase of 127.12%.
Looking at the single-quarter split, 2Q2023 achieved operating income of 197 million yuan, a year-on-year increase of 32.06%, and realized net profit of 28 million yuan, converted to a fully diluted EPS of 0.07 yuan, an increase of 506.47% over the previous year, and realized net profit of 28 million yuan after deducting non-attributable net profit of 28 million yuan, an increase of 627.40% over the previous year.
The company's comprehensive gross margin for 1H2023 increased by 1.28 percentage points, and the cost ratio for the period decreased by 6.12 percentage points. 1H2023's comprehensive gross margin was 54.69%, up 1.28 percentage points from the previous year. Looking at the quarterly split, 2Q2023's overall gross margin was 55.74%, up 1.73 percentage points from the previous year.
The 1H2023 company's expenses rate for the period was 34.85%, down 6.12 percentage points from the previous year. Among them, the sales/management/financial expenses ratio was 4.65%/33.77%/-3.58%, respectively, and the year-on-year change was -1.28/ -5.04/+0.20 percentage points, respectively. The 2Q2023 company's expenses rate for the period was 34.63%, down 10.94 percentage points from the previous year. Among them, the sales/management/finance expense ratio was 4.74%/33.55%/-3.66%, respectively, and the year-on-year change was -1.69/-10.19/ +0.93 percentage points, respectively.
The department store business is recovering smoothly, using online channels to strengthen marketing efforts offline. As of the end of June 2023, the company operated a total of 1 department store and 4 supermarkets. Among them, the 1H2023 department store business achieved terminal retail revenue of 353.3812 million yuan, a year-on-year increase of 21.64%, and realized net profit of 55.648,500 yuan; the supermarket business achieved terminal retail revenue of 19.734,400 yuan, a year-on-year decline of 10.46%, and realized net profit of -3,5744,400 yuan. On the online side, 1H2023's online transaction volume was 9.886 million yuan, and online transactions generated revenue of 2,547,400 yuan. In terms of marketing, 1H2023 has refined the operation and management of applets, planned online activities such as “ZTE Flash Sale” and “Happy Rise 5”, and actively explored the acquisition of customers from Douyin Live and other new media platforms.
Raise profit forecasts and maintain the “increase in holdings” rating
The company's performance exceeded our previous expectations, mainly due to the good recovery process of the company's department store format. At the same time, the company's expenses rate declined significantly year-on-year, which is conducive to improving the company's profitability. We raised the company's EPS forecast for 2023/2024/2025 by 16%/20%/19% to 0.27/0.29/0.32 yuan. The company has a certain regional competitive advantage in Shenyang and other places, continuously increasing the degree of online development, and maintaining a “increase in holdings” rating.
Risk warning: The operating conditions of major stores fell short of expectations, and the improvement in operations after the mixed reform fell short of expectations.