Event: on October 26, the company released its third quarter report of 2023. 2023Q1-Q3 achieved operating income of 62.088 billion yuan / year-on-year-12.44%, net profit of 52 million yuan (- 887 million yuan in the same period last year), and non-return net profit of-375 million yuan (- 642 million yuan in the same period last year). In the third quarter alone, the company achieved operating income of 20.061 billion yuan / year-on-year-9.54%, net profit of-321 million yuan (- 775 million yuan in the same period last year), and non-return net profit of-474 million yuan (- 737 million yuan in the same period last year).
The store end continues to adjust and optimize, and the online share continues to rise. 1) during the reporting period, the store end of the company continued to adjust and optimize. 2023Q3 opened one new store across the country, located in Hebei Province, signed 6 new supermarket stores, and took the initiative to optimize stores and eliminate some loss-making stores. 2) the online share continues to increase, 2023Q1-Q3, online business revenue of 12.26 billion yuan, an increase of 5.69% over the same period last year, accounting for 19.75% of the main income (about 18.7% in the first half of the year). Among them: Yonghui Life's self-operated business has covered 930 stores, achieving sales of 6.38 billion yuan, with an average daily volume of 311,000 units, and the average monthly repurchase rate is 49.8%. The tripartite platform-to-home business has covered 908 stores, with sales of 5.88 billion yuan, an increase of 10.94% over the same period last year, with an average daily volume of 206,000.
The gross profit margin has recovered somewhat, and the expense rate has slightly increased compared with the same period last year. 1) 2023Q1-Q3, the company's gross profit margin is from + 1.7pct to 21.6% compared with the same period last year, of which 2023Q3 gross profit margin is 20.9% / year-on-year + 1.8pct, which mainly benefits from the continuous optimization of category structure and the improvement of supply chain efficiency. 2) in the first three quarters, the sales expense rate / management expense rate / financial expense rate / R & D expense rate is 17.9%, 2.3%, 0.4%, 1.6%, respectively, compared with the same period last year + 1.1pct/+0.3pct/-0.1pct/0.0pct.
Investment suggestion: the company is the offline supermarket leader in Johnson & Johnson's fresh supply chain. Since the second half of 2020, community group buying and other new channels have attacked, and the company's operation has been challenged to a certain extent; after entering the 2022H1, the company's competitive environment and its own operating conditions have improved, and at present, with the recovery of the macro environment and offline passenger flow, the company's operation has been continuously optimized and the company's profitability has been improved. In 2023, it made a profit in the first three quarters, thanks to operational efficiency and the continued increase in the fair value of financial assets held. With reference to the business situation of the first three quarters, the forecast of homing net profit in 2023-2025 is adjusted to-500 million /-130 million / 220 million, and the EPS is-0.05yuan / share,-0.01yuan / share, 0.02yuan / share respectively, downgrading to "overweight" rating.
Risk tips: manpower, rental costs increased significantly; shop expansion is not as expected; industry competition is obviously intensified.