The company's revenue for 2023 increased by 2.97% year on year, achieving net profit of 217 million yuan. On March 27, the company announced its 2023 annual report: in 2023, it achieved operating income of 5.539 billion yuan, up 2.97% year on year, and realized net profit of 217 million yuan. In the same period of the previous year, it was -011 million yuan, achieving net profit without deduction of 68 million yuan, compared to -45 million yuan in the same period last year. In the first half of 2023, the company transferred the Texas Mall, which had an impact on the company's net profit of RMB 93.6287 million.
Looking at the single-quarter split, 4Q2023 achieved operating income of 1,034 billion yuan, an increase of 12.38% over the previous year, and realized net profit of -0.19 million yuan, compared to -111 million yuan in the same period last year. The amount of loss narrowed year-on-year, and realized net profit deducted from non-mother of -16 million yuan.
The company's comprehensive gross margin increased by 1.03 percentage points in 2023, and the cost ratio decreased by 0.65 percentage points during the period. The company's comprehensive gross margin in 2023 was 41.48%, up 1.03 percentage points from the previous year. Looking at the single-quarter split, 4Q2023's comprehensive gross margin was 52.58%, up 2.70 percentage points from the previous year.
The company's expense ratio for the 2023 period was 35.78%, down 0.65 percentage points year on year. Among them, sales/management/ finance/R&D expenses were 26.44%/3.61%/5.49%/0.24%, respectively, with year-on-year changes of +0.16/-0.28/ -0.57/+0.04 percentage points, respectively. The 4Q2023 company's expense ratio for the period was 49.13%, down 5.94 percentage points year on year. Among them, sales/management/finance/R&D expenses were 36.27%/4.66%/7.88%/0.32%, respectively, with year-on-year changes of -1.36/ -3.94/ +0.17/ -0.82 percentage points, respectively.
The product and brand structure has been adjusted and optimized, and the online and offline integrated company will continue to open 7 new stores and close 4 stores in 2023; as of March 27, 2024, the company had a total of 120 stores (23 in Huaxing, Linqu, Weifang). In supermarkets, the company replaced nearly 30,000 products in 2023, and the average procurement cost for key fresh food categories dropped by more than 5% year-on-year. In terms of Baigou, in 2023, the company strengthened strategic brand control and introduction of the first store, and introduced a number of first stores in Shandong and the first in the city. On the online side, in 2023, the company further enhanced the degree of online and offline integration through measures such as improving the Ginza Cloud Shopping Platform, strengthening cooperation with the three-party instant retail platform, introducing SCRM and MA systems, increasing the application of digital management tools, and building a business center and data center, and improving the efficiency of the company's operations and management.
Raise profit forecasts and maintain the “increase in holdings” rating
The company's profit performance in the second half of the year exceeded our previous expectations, mainly due to the increase in the company's gross margin, a year-on-year decline in expenses and an improvement in profitability. We raised our 2024/2025 EPS forecast by 29%/18% to 0.15/0.17 yuan, and added 0.18 yuan for the company's 2026 EPS forecast. The company has certain competitive strength in Shandong and other places, continuously improving the degree of online and offline integration, and maintaining a “gain” rating.
Risk warning: Some store leases cannot be renewed when they expire, and the pace of new business formats and new store expansion falls short of expectations.