Event: On October 26, the company released the third quarterly report of 2023. From Q1 to Q3 of 2023, the company realized operating income of 13.879 billion yuan/year-on-year-0.60%, net profit attributable to parent company of 208 million yuan/year-on-year +11.09%, net profit deducted from non-parent company of 191 million yuan/year-on-year +21.24%. Among them, 2023Q3 Company realized operating income of 4.788 billion yuan/year-on-year +4.46%, net profit attributable to parent company of 24.3662 million yuan/year-on-year +71.55%, net profit deducted from non-parent company of 18.9974 million yuan/year-on-year +820.40%.
Stores continue to expand, snack collection stores continue to open. The Company continued to promote the development strategy of regional density, urban-rural integration and multi-format, and optimized the store structure: 2023Q3, the Company opened 31 direct-sale stores, including 6/9/1/10/5 comprehensive supermarkets/community fresh food supermarkets/rural supermarkets/Yueji snack stores/other formats, and closed 16 stores. By the end of the period, the total number of stores was 1023, including 976 direct-sale stores and 47 franchised stores.
Gross profit margin increased slightly, and the expense end was relatively stable. The gross profit margin of the company in the first three quarters increased by 0.4pct to 23.6% year-on-year, among which the gross profit margin of Shandong/other provinces increased from-0.09pct/+1.90pct to 19.56%/18.93% respectively. Sales expense ratio/management expense ratio/financial expense ratio for the first three quarters were 17.8%/2.0%/1.3% respectively,+0.1pct/+0.0pct/-0.2pct respectively.
Continuous optimization of online supply chain capacity has been improved. 1) The company continues to improve the modes of live broadcasting and community grouping. The online business in 2023H1 is about 7.67 million units, with a year-on-year growth of about 40%. The online sales in 2023H1 account for about 5.44% of the overall supermarket sales/year-on-year +1.3pct, and the all-channel capability has been strengthened; 2) The first phase of Jinan Logistics Park Project was put into use in 2023H1, and Huaibei Phase II Project was started. The Company completed the three-dimensional layout of logistics network around the current network layout, basically established a three-hour distribution circle from logistics center to stores, and improved the support capacity of supply chain platform.
Investment advice: The company is the leader of Shandong Shangchao. Relying on its strong supply chain capability and fresh characteristics, the company's position in the province continues to consolidate. At present, in addition to deep cultivation of advantageous areas and continuous encryption of store coverage, the company actively covers areas other than Yanwei and areas outside Hebei and Anhui provinces through mergers and acquisitions, joining and other forms, and has made certain progress. The same store in Q3 has recovered somewhat, but with reference to the current competition situation and the company's recent recovery, Adjust the net profit attributable to the parent company from 2023 to 2025 to CNY 2.34/2.77/3.49 million, and the corresponding valuation of the current stock price is 30 times/26 times/20 times PE respectively, maintaining the rating of "overweight".
Risk tips: high business concentration risk; expansion, same-store improvement is not as expected; macroeconomic risk.