The company released its third quarterly report for 2023:
23Q1-3, the company realized operating income of 235.59 billion yuan /-6.16%, realized net profit of 344 million yuan (- 190 million yuan in the same period last year), and deducted non-return net profit of 277 million yuan (- 225 million yuan in the same period last year). After dismantling Q3, the company achieved an operating income of 7.227 billion yuan /-9.63%, a net profit of 16 million yuan (- 74 million yuan in the same period last year), and a non-return net profit of 4 million yuan (- 96 million yuan in the same period last year). The decline in revenue is mainly due to the pressure on the business operation of large-scale comprehensive supermarkets; the turnaround of performance is mainly due to the company's strengthening the construction of supply chain and the creation of commercial landmarks to improve quality and efficiency.
Profitability has improved, and the cost side is basically stable.
23Q3 company gross profit margin is 26.41%/+1.91pcts, sales expense rate 17.33%/-0.14pct, management expense rate 7.56%/+0.37pct, financial expense rate-0.10%/-0.48pct, R & D expense rate 0.06%/+0.01pct. The net interest rate is 0.23%/+1.15pcts.
Department stores, shopping malls, Olai have all maintained high growth, large-scale comprehensive overload under pressure.
In the first three quarters of 2023, (1) Olai took the lead in business recovery: the company optimized its business layout and upgraded its brand energy level, with a revenue of 985 million yuan / + 46.36% and a gross profit margin of 73.46%/10.16pcts. (2) Shopping center maintained high growth: income 1.539 billion yuan / + 30.30%, gross profit 43.30%/+12.19pcts, according to the company official account, the key renovation project Bailian West suburb Shopping Center has completed the optimization of space movement, the introduction of the first store, etc., and opened for trial operation on October 27; (3) department store; income 1.038 billion yuan / + 25.00%, gross profit 24.89%/+5.00pcts (4) large-scale comprehensive super business is under pressure: revenue of 8.426 billion yuan /-22.76%, gross profit margin 23.45%/+2.41pcts, and net closure of 11 stores during the reporting period; (5) supermarkets / convenience stores / professional specialty stores achieved income of 87.90pm, 1.306 and 627 million respectively, year-on-year-2.55% of "9.87% lead" 34.94%, and net increase of 100pm of stores during the reporting period.
It is proposed to participate in the investment and establishment of Pre-REITs fund to expand the chain with light asset model.
According to the company announcement, the company plans to jointly set up Bailian Guotai Junan Commercial Pre-REITs Fund with Guotai Junan Innovation Investment Co., Ltd., Shanghai Bailian Asset Holdings Co., Ltd. And its subsidiary Shanghai Bailian Asset Management Co., Ltd., with a total target contribution of RMB 1 billion, of which the company intends to subscribe to RMB 100 million. The direction of investment is to directly or indirectly acquire corporate equity in consumer infrastructure projects (community commerce, shopping malls, OUTLETS, etc.) that meet the requirements of the public offering of consumer infrastructure (community commerce, shopping malls, OUTLETS, etc.), and focus on core assets / core value-added assets with occupancy rates, good rents and stable operation, and abundant cash flow, with particular regional focus on Shanghai, core cities in the Yangtze River Delta and Chengdu. The establishment of the fund will help the company to expand the chain with the help of the light asset model, lock in high-quality assets in advance, improve the ability of business operation and management, and broaden the channels of personnel training.
Investment advice:
Buy-An investment rating. We estimate that in 2023-2025, the company will achieve revenue of 324.07pm 342.23max RMB 35.631 million, year-on-year + 0.43% Universe 5.61% Universe 4.11%, and net return to its mother RMB 6.97pm 812max RMB, year-on-year + 1.8% RMB16.51% Universe 15.02%. 2024 30xPE, corresponding to the 6-month target price of 13.65 yuan.
Risk tips: macroeconomic risks, industry competition to intensify risks, management of operational risks, new business type's development is not as good as expected risks.