The company released its semi-annual report for 2023:

23H1, the company realized operating income of 163.32 billion yuan /-4.54%, realized net profit of 328 million yuan (- 116 million yuan in the same period last year), and deducted non-return net profit of 273 million yuan (- 129 million yuan in the same period last year). After dismantling Q2 alone, the company achieved an operating income of 6.845 billion yuan / + 0.33%, a net profit of 116 million yuan (- 272 million yuan in the same period last year), and a non-return net profit of 81 million yuan (- 275 million yuan in the same period last year). The main reason for the turnround is that companies seize the opportunity of consumer recovery to improve quality and efficiency through digital reform, strengthening supply chain construction, creating commercial landmarks, and so on.

Profitability has improved, and the cost side is basically stable.

23H1's gross profit margin is 26.56%/+3.23pcts, sales expense rate 15.54%/+0.13pct, management expense rate 6.90%/+0.10pct, financial expense rate 0.002%/-0.45pct, mainly due to the increase in interest income in the current period compared with the same period last year, and the R & D expense rate 0.06%/+0.01pct. The net interest rate is 2.01%/+2.69pcts.

Upgrade commercial brands, build a new ecology of consumption, department stores, shopping malls, Ole three major formats have achieved eye-catching growth.

(1) Department stores: income 721 million yuan / + 42.22%, gross profit 26.88%/+4.85pcts, building commercial landmarks and vigorously developing the economy of the first store. For example, Bailian ZX is positioned as China's first commercial body focusing on two-dimensional culture, introducing 13 national stores; TX Huaihai creates a gathering place for trendy culture through laboratories and theme concept stores. The first department store commercial center introduced art exhibitions, performing arts, creative bookstores and other forms of business, the introduction of young passenger flow has achieved remarkable results. (2) Shopping center: income 1.06 billion yuan / + 46.62%, gross profit margin 42.97%/+16.00pcts, grasp consumption trend, upgrade commercial brands, such as Bailian West suburb Shopping Center as a key renovation project of urban renewal, will fully combine the concepts of art, culture, IP, brand and so on. (3) OUTLETS: revenue of 699 million yuan / + 56.36%, gross profit margin 75.37%/+10.54pcts, the company's ninth boutique in Qingdao Jimo officially opened on April 28, and the brand portfolio will be optimized in Qingpu Olai Phase I in the second half of the year. (4) the income of supermarkets / convenience stores / large-scale comprehensive supermarkets / professional specialty stores reached RMB 60.67, 8.54, 59.10 million, respectively, compared with the same period last year, which was + 2.46%, 16.93%, 24.13, 52.92%, respectively. During the reporting period, the number of stores increased by 55%, respectively.

Investment advice:

Buy-An investment rating. We estimate that in 2023-2025, the company will achieve revenue of 343.87 million yuan, 3.7412 million yuan, + 6.56%, 4.65%, 3.97%, and 7.23, 838, 973 million yuan, respectively, compared with the same period last year. Maintain 38xPE in 2023, corresponding to the target price of 15.39 yuan for 6 months.