2023H1 benefited from the recovery in consumption after the epidemic, and the company achieved deducting non-attributable net profit of 140 million yuan (2022H1:
-100 million yuan). 2023H1, the company bought 100 per cent, the revenue of comparable supermarket stores was +6.8%/-2.7%, and the total profit of comparable stores was +85.8%/-7.4%. At 2023H1, the company's exposure and GMV on Douyin were 70,000,000,000,000/230 million yuan respectively, +117%/+949% over the same period; at the same time, the company has a total of 13 reserve projects in hand, laying a solid foundation for steady growth in performance. Give 28 times PE in 2023, corresponding to a target price of 7.0 yuan, and maintain the “increase in holdings” rating.
Revenue was flat, adjusted after deducting non-net profit. In 2023H1, the company achieved operating income/net profit of 6.23 billion/210 million yuan, respectively, compared with +0.01%/+34.1%, after deducting non-attributable net profit of 140 million yuan (2022H1: -100 million yuan). Significant changes in non-recurring profit and loss include: 2023H1 Company closed Yichun Tianhong Shopping Center to confirm asset disposal gains and losses and other related expenses, which affected an increase of about 60 million yuan in net profit for the current period. 2023Q2 achieved operating income/net profit of 2.85 billion yuan/0.1 billion yuan respectively (2022Q2:
2.77 billion yuan/-120 million yuan), net profit not attributable to parent - 0.3 billion yuan (2022Q2: -160 million yuan). 2023H1,
The company's main retail business achieved revenue of 6.04 billion yuan, +0.6% year on year, and net operating cash flow of 850 million yuan, +47.1% year on year.
Shopping 100 recovered strongly, and supermarkets declined slightly. 2023H1, the company purchased 100 (shopping malls+department stores) /the revenue of comparable supermarkets +6.8%/-2.7%, and the total profit of comparable stores was +85.8%/-7.4%. The profit profit of the Buy100 Comparable Store business increased sharply year on year, mainly due to the low base of 2022H1 due to the impact of the epidemic. 2023H1, the total amount of social zero in the country increased by 8.2% year on year. The company benefited from the overall consumption recovery after the epidemic. 2023H1, the company opened 1 new shopping center, 1 purchased 100 and 2 supermarkets, and did not renew its contract with Shenzhen Guomao Tianhong due to contract expiration; as of 2023/6/30, the company had 101 department stores/shopping centers (including 6 franchisees, management and export) and 117 supermarkets (including 31 independent supermarkets), with a total area of about 4.57 million square meters.
Business highlights: Continued development of online business, with sufficient reserve projects. 2023H1, the company's supermarket door-to-door sales volume was +6.7%, accounting for 21.5% of sales; in-store sales volume was +15.7%, accounting for more than 22% of sales; the “517 Food Festival” new IP was launched, and the online revenue of stores and restaurants was +737%. 2023H1, sales of the company's strategic core product group +2% year-on-year; 33 major products were developed, and sales volume was +45% year-on-year.
The company's own brand invigorates brand marketing. 2023H1. The company's exposure on Douyin and GMV was 7.1 million/230 million yuan, respectively, +117%/+949% over the same period. Among them, live broadcast card and voucher sales reached a record high of 50 million yuan in June. The company ranked first in Douyin's Shenzhen Group Buying and Delivery Week list during the 618 period. As of 2023/6/30, the company has signed a total of 13 reserve projects to be opened, including 9 shopping malls and 4 independent supermarkets, with a total area of about 663,000 square meters.
Open stores and reduce fees to promote growth, and REITs help optimize channels. According to the company's 2023 mid-year report performance exchange meeting, the company plans to return REITs funds, which are mainly used for: 1) opening new stores (Jiangsu/Changsha/Jiangxi); 2) upgrading of old stores; 3) investment in digital operations; 4) revitalizing existing project assets to absorb more high-quality assets in the future. The company continuously explores changes in the stock structure, actively optimizes the channel structure layout, closes stores with long-term losses, and focuses on profit expectations and supplier synergies. The company has mainly set up two main lines for cost control: 1) strong control of all cost standards in various departments, organizational change (the number of own employees continues to decline); 2) digital intelligence transformation (robot/GPT), and optimization of shopping mall operating expenses (labor/rent/utility).
Risk factors: Macroeconomic growth is slowing down, consumer spending capacity is under pressure; retail industry channels are diversified and competition is fierce; the company's new store cultivation falls short of expectations; the company's store type innovation results fall short of expectations.
Investment suggestions: Considering that the 2023Q2 consumer demand recovery fell short of expectations and the company's performance slowed down, the 2023-24 revenue forecast was adjusted to 12.6 billion/13.34 billion yuan (the original forecast was 13.16 billion/13.8 billion yuan); considering that competition in the industry is still intense, various expense rates are still high. At the same time, since 2023Q1 has achieved net profit of 210 million yuan, Q2 declined significantly from month to month, so maintain 2023 and adjust the 2024 net profit forecast to 290 million/3.1 billion yuan (original The 2024 forecast is 330 million yuan), corresponding to the 2023-24 EPS forecast of 0.25/0.27 yuan, respectively (the original 2024 forecast was 0.29 yuan). The Baishang supermarket business format is quite mature. Considering that the company is actively optimizing the stock channel structure layout, it is expected that the net interest rate level will increase. The revenue forecast for 2025 is 13.99 billion yuan, the attributable net profit forecast is 340,000 million yuan, and the corresponding EPS forecast is 0.29 yuan; referring to industry and comparable company valuations (Wind unanimously expects 2023: Wangfujing 24x PE, Yonghui supermarket 97x PE), the company was given 28xPE in 2023, corresponding to a target price of 7.0 yuan, maintaining the “increase in holdings” rating.