Main points of investment:
The company released its third quarterly report for 2023, and the results were in line with expectations. According to the company announcement, 1) in the first three quarters of 2023, the company achieved revenue of 62.088 billion yuan, down 12.44% from the same period last year, mainly because the competitive environment was still very severe and the company took the initiative to optimize stores and eliminate some loss-making stores, resulting in a net profit of 52 million yuan, turning losses into profits over the same period last year. The mother deducted the non-net profit of-375 million yuan, and the loss narrowed by 267 million yuan compared with the same period last year. 2) 23Q3 achieved 20.061 billion yuan in revenue,-9.54% year-on-year, and realized net profit / non-return net profit of-321 million yuan, with a loss of 453,000,000 yuan narrowed by 262 million yuan compared with the same period last year.
The online channel performs well, and the user stickiness continues to increase. According to the company announcement, 23Q3, the company continues to promote the implementation of store optimization and adjustment strategy, opening 1 new supermarket store and signing 6 new supermarket stores. At the same time, the company continued to cultivate online channel business, and 23Q1-Q3/23Q3 achieved online sales of 12.26 billion yuan / 4.34 billion yuan respectively, an increase of 5.69% and 22.25% over the same period last year. 23Q1-Q3 online sales accounted for 19.75% of the total channel main revenue, year-on-year + 3.35pct, the contribution of online sales continued to increase. 23Q1-Q3/23Q3 Yonghui self-operated business achieved sales of 6.38 billion yuan / 2.32 billion yuan. 23Q1-Q3 Yonghui operates its own home-to-home platform with an average daily volume of 311,000 orders and an average monthly repurchase rate of 49.8%. Users are still sticky. The sales of 23Q1-Q3 's third-party platform-to-home business reached 5.88 billion yuan, an increase of 10.94% over the same period last year, with an average daily volume of 206,000, showing a steady growth trend online.
The gross profit margin has gradually rebounded, and measures to reduce costs and increase efficiency have been further promoted. In the first three quarters, the company's expense rate during the period was 22.25%, an increase of 1.29pct over the same period last year, of which the sales / management / finance / R & D expense rate was 17.88%, 2.30%, 1.62%, 0.45% and + 1.08pct/+0.29pct/-0.01pct/-0.07pct, respectively. Under the combined influence, the company's net return rate in the first three quarters of 2023 was 0.08%, year-on-year + 1.33pct. 23Q3's comprehensive gross profit margin is 20.88%, year-on-year + 1.85pct; the company's expense rate is 23.58%, year-on-year + 0.41pct, in which the sales / management expense rate is 19.13%, 2.4%, an increase of 0.70pct/0.00pct, and the financial / R & D expense rate is 1.7%, 0.35%, a year-on-year decrease of 0.08/0.21pct. Under the combined influence, the 23Q3 homing net interest rate was-1.6%, an increase of 1.89pct over the same period last year.
Technology enabling supply chain, Yonghui launched authentic discount stores. According to the company announcement, the company continues to make efforts to build medium-and long-term digital supply chain capabilities, uses scientific and technological tools to optimize supply chain processes and mechanisms, digitally selects products based on stores and user portraits, and strengthens innovative R & D cooperation with suppliers. Category planning drives upstream commodity research and development. According to 36Kr Holdings and retail business and financial data, Yonghui will set up more authentic discount stores across the country, as well as additional discount zones on online APP/ Mini Program to provide surprise discounts on food and supplies. Relying on the company's existing stores, the "discount store secondary area" is expected to replicate quickly across the country. Different from the traditional operation logic of temporary commodity discount price, the company will take improving commodity efficiency as the core, and through digital means such as supplier system, select some of the new products, online celebrity goods and conventional goods to enter the discount commodity pool to achieve differentiated operation.
Maintain a "buy" rating. In 2023, the company will continue to cultivate supply chain construction and science and technology in Taiwan to drive performance development, and make every effort to build a fresh-based, customer-centered omni-channel digital retail platform, by giving full play to the advantages of the supply chain and its own brand innovation, we are optimistic about the steady growth of the company's performance in the medium and long term. Considering the fluctuation of short-term profit caused by the company's continuous promotion of store optimization, while the revenue performance is relatively stable, we maintain the company's operating income forecast for 23-25 years at 875, 910, 100, 000, 000 Comparable companies maintain a "buy" rating with an average PS of 0.51, 0.48, 0.46.
Risk hint: industry competition intensifies, digital transformation is not as expected, and new store cultivation is not as expected.