Incident: The company announced its 2023 results, achieving revenue of 12.086 billion yuan, a year-on-year decrease of 0.32%, net profit to mother of 227 million yuan, an increase of 88.75%, and net profit after deducting non-return to mother of 128 million yuan, an increase of 168.02%.
Among them: 1) The closing of long-term loss-making stores in 2023 increased the net profit from the disposal of the right to use assets by about 100 million yuan; 2) the sale of Tianhong Weiwow convenience store shares in 2022 increased the net profit to the home mother by about 179 million yuan; 3) rent relief for merchants in 2022 reduced the net profit of the return home mother by about 98 million yuan. The company plans to distribute a cash dividend of 1.6 yuan (tax included) for every 10 shares, with a total profit distribution of 187 million yuan, accounting for 82.5% of net profit due to mother in 2023.
Comment:
2023Q4 reverses losses after deducting non-return net profit. 2023Q4 achieved revenue of 2,835 billion yuan, a year-on-year decrease of 2.34%, net profit to mother of 2.04 million yuan, a decrease of 62.7%, after deducting net profit of 7.15 million yuan from non-return mother, turning a year-on-year loss into a profit.
Store restructuring and upgrading to improve operational efficiency. By the end of 2023, the company had entered 34 cities in 7 provinces/cities in Guangdong, Jiangxi, Hunan, Fujian, Jiangsu, Zhejiang and Beijing, operating 41 shopping malls (including 4 franchisees), 59 department stores (including 1 franchise), 116 supermarkets (including 29 independent supermarkets), with a total area of 4.58 million square meters. In 2023, a total of 5 stores closed, including 1 net shopping center, 3 department stores, and 3 supermarkets.
Buy100 benefited from the recovery of consumption and the upgrading of business formats. Customer traffic and sales continued to increase from quarter to quarter, and the total operating income and profit of comparable stores increased both. In 2023, shopping centers/department store/supermarket self-operated stores achieved revenue of 20.3/22.6/7.62 billion yuan respectively, +17.46%/+2.77%/-4.04% year-on-year. Shopping center comparable stores had sales of 13.1 billion yuan, an increase of 18.18%, revenue of 1.9 billion yuan, an increase of 14.29%, total profit of 225%, and monthly efficiency of 1,096 yuan. Comparable department stores had sales of 12.4 billion yuan, an increase of 10.86%, revenue of 2.2 billion yuan, an increase of 5.25%, total profit also increased 10.1%, and a monthly efficiency of 1,267 yuan.
Supermarkets were affected by last year's high base and changes and adjustments during the year, leading to a year-on-year decline in the total operating income and profit of comparable stores. In '23, the revenue of comparable supermarket stores was 7.1 billion yuan, down 4.01%. Among them, customer order volume/customer unit price were +3.7%/-7.9%, monthly efficiency was 3,189 yuan, gross profit margin 23.55% (-0.32PCT), and total profit decreased by 20.29%.
Revenue increased by product, department store retail, and catering facilities, while the rest of the categories declined to varying degrees. In 2023, fresh food/ packaged food/ department store retail/ daily necessities/ catering packages achieved revenue of 31.16/31.43/26.46/13.78/14.49 billion yuan, -7.34%/-2.52%/+6.13%/-2.97%/+22.07%, accounting for 25.77%/26.01%/21.89%/11.40%/11.99%. Among them, fresh and cooked food, packaged food, and daily necessities are mainly operated by supermarkets. In 2023, the gross margin of fresh/packaged food/department store retail/ daily necessities/catering facilities was 22.45%/22.33%/71.77%/27.08%/43.48%, respectively, +0.36/-0.66/+0.50/-0.22/+8.94PCT.
The sales, management, and R&D expense rates in 2023 were 32.12%/3.14%/0.68%, respectively, +0.21/+0.12/-0.07PCT. The total amount of impairment provisions for each asset in 2023 is approximately RMB 20.56 million.
The company plans to use Suzhou Xiangcheng Tianhong Shopping Center, owned by Suzhou Tianhong Commercial Management Co., Ltd., a wholly-owned subsidiary, as the underlying asset to carry out the application and issuance of public REITs projects. The company will subscribe for 34% of the public REITs project set up by China Aviation Fund. The transaction price will be determined based on the final infrastructure asset evaluation value and public REITs inquiry results. This subscription not only helps the company optimize its debt structure and return funds, but also has certain control over the project company to ensure the stable operation of underlying assets.
Profit forecast: According to iFind's consistent forecast, the company's revenue for 2024-2026 was 126/128/13.2 billion yuan, up 4%/2%/2%, net profit due to mother was 2.5/27/30 billion yuan, up 10%/9%/9%, EPS 0.22/0.24/0.26 yuan, corresponding to the closing price of March 15 PE was 23/21/19X, respectively.
Risk factors: CPI declined, consumer demand recovery fell short of expectations, and competition in the offline retail industry intensified.