Event description
According to the company's mid-2023 report, the operating income in the first half of the year was 42.03 billion yuan, down 13.76% from the same period last year. The net profit was 374 million yuan, compared with a loss of 112 million yuan in the same period last year. The net profit was 99.33 million yuan, up 5.56% from the same period last year. In the second quarter alone, the operating income was 18.23 billion yuan, down 15.18% from the same period last year, with a net loss of 330 million yuan, a loss reduction of 283 million yuan, a non-return net loss of 519 million yuan, and a loss reduction of 15.15 million yuan over the same period last year.
Event comment
In the second quarter, the decline in income expanded slightly, the gross profit margin increased, and the operating profit was basically flat compared with the same period last year. Restricted by the cautious consumption of residents in the period, the company cautiously opened new stores, adding 4 new stores in the first half of the year, while taking the initiative to eliminate long-term loss stores, closing 29 supermarket stores in the first half of the year, with a total of 1008 stores by the end of the reporting period. Store optimization and adjustment reduced Q1/Q2 revenue by 12.63% and 15.18% respectively compared with the same period last year. Among the main categories, the income of the food products category reached 21.965 billion yuan, down 10.1% from the same period last year, with a relatively smaller decline, and the gross profit margin increased by 2.46% year-on-year to 19.09% The income of the fresh and processing category reached 17.091 billion yuan, down 18.24% from the same period last year, or because the demand for hoarding in the epidemic decreased compared with the same period last year, but the gross profit margin also increased by 0.55% to 13.22%. The overall gross profit margin of the company increased by 1.64 percentage points to 21.99% in the first half of the year. From the expense point of view, the sales expense rate increased by 2.13% to 19.88% in the second quarter, mainly due to the relative rigidity of employee compensation and amortized expenses, which decreased by 7.1% and 5.6% respectively compared with the same period last year; management / R & D / financial expense rates were + 0.05%,-0.03% and + 0.04% respectively compared with the same period last year. The above synthesis makes the operating profit ((gross profit-taxes and additional-sales expenses-management expenses-R & D expenses-financial expenses) to-661 million yuan, which is basically the same as the same period last year; the second quarter net profit deducted from non-return to home decreased by 15.15 million yuan compared with the same period last year; plus non-recurrent profits and losses such as non-current assets disposal and government subsidies, the net profit returned to home in the second quarter decreased by 283 million yuan compared with the same period last year.
Online business and private brand performance is eye-catching. In the first half of the year, online business revenue was 7.92 billion yuan, an increase of 4.4% over the same period last year, accounting for 18.7% of the total channel main revenue, an increase of about 1 percentage point over 2022. Thanks to the optimization of category structure and the improvement of supply chain efficiency, commodity gross profit margin was the highest in nearly three years. During the reporting period, Yonghui Life's self-operated business covered 946 stores, with sales of 4.06 billion yuan, with an average daily volume of 295,000 units, with an average monthly repurchase rate of 48.9%. The third-party platform business has covered 922 stores, achieving sales of 3.86 billion yuan, an increase of 10.9% over the same period last year, with an average daily volume of 197000 units. The company continues to develop its own brand through the construction of supply chain cooperation ecology. in the first half of the year, the private brand supply chain introduced more than 60 source suppliers with planting bases and innovative research and development, of which 34 formed strategic cooperation. in the first half of the year, private brand sales reached 1.95 billion yuan, accounting for 4.64%, an increase of 15.2% over the same period last year, and double-digit growth through online channels Online business accounts for 22.5% of sales.
Investment advice: at present, the company is in the period of business transformation and upgrading, and pays more attention to the internal supply chain and technology center construction than store expansion. If the business optimization progresses smoothly and reflects the actual improvement in store efficiency, the company is expected to restart replication expansion, thereby boosting performance and valuation. It is estimated that the company's return net profit from 2023 to 2025 is 2.63,4.53 and 871 million yuan respectively, corresponding to a "buy" rating of 0.32 times the PS valuation in 2023.
Risk hint
1. Residents' consumer confidence continues to be weak.
2. The emergence of new business type intensifies the competition in the industry.