The company's 2023 revenue increased 13.26% year on year, and net profit to mother decreased by 30.72% year on March 29. On March 29, the company announced its 2023 annual report: achieved operating income of 7.178 billion yuan, up 13.26% year on year, and realized net profit to mother of 209 million yuan, equivalent to fully diluted EPS of 0.27 yuan, a year-on-year decrease of 30.72%, achieving net profit deducted from non-return mother of 83 million yuan, a year-on-year decrease of 70.51%.
Looking at the single-quarter split, 4Q2023 achieved revenue of 1,740 billion yuan, an increase of 17.88% over the previous year, and achieved net profit of 91 million yuan (-30 billion yuan in the same period last year, turning a loss into a profit), which translates into a fully diluted EPS of 0.12 yuan, achieving net profit without deduction of -0.13 billion yuan.
The company's comprehensive gross margin increased by 2.28 percentage points in 2023, and the cost ratio increased by 5.81 percentage points during the period. The company's comprehensive gross margin in 2023 was 47.03%, up 2.28 percentage points from the previous year. Looking at the single-quarter split, the consolidated gross margin of 4Q2023 was 47.82%, up 1.39 percentage points from the previous year.
The company's expense ratio for the 2023 period was 41.00%, up 5.81 percentage points year on year. Among them, the sales/management/finance expenses ratio was 33.75%/2.79%/4.46%, respectively, with a year-on-year change of +4.03/ -0.73/+2.51 percentage points, respectively. The 4Q2023 company's expense ratio for the period was 42.71%, a year-on-year decrease of 2.44 percentage points. Among them, the sales/management/finance expense ratios were 35.04%/2.68%/4.99%, respectively, with year-on-year changes of -2.02/-1.72/ +1.30 percentage points, respectively.
Major stores are upgraded and restructured, and various marketing activities are actively carried out
By business type, in 2023, the company's shopping center business achieved revenue of 3.200 billion yuan, an increase of 9.15% over the previous year; the supermarket business achieved revenue of 2,469 billion yuan, a year-on-year decrease of 5.23%. In terms of store expansion, the company opened Nanchang Wushang Mall and “WS Dream Park” in 2023; the Wushang supermarket opened 5 new stores, upgraded 3 stores, and expanded 15 small stores. In terms of main business operations, in 2023, the company's former Guoguang and Wuguang were integrated into the new Wushang Mall; the Wushang Mall World Trade Center explored a new model of gold and jewelry self-management; Wushang City Olay introduced a number of Ole's first stores and initiated negotiations on new energy vehicle projects. In terms of marketing, the company hosts multicultural events such as IP exhibitions, light shows, concerts, and Hanfu trips to attract visitors to the mall.
Raise profit forecasts and maintain “buy” ratings
The company's profit performance exceeded our expectations, mainly due to the company's active store adjustments, which made up for the negative impact of Dream Era Investment on the company's profits to a certain extent. Considering that the profitability of the company's newly opened stores is expected to improve further, we raised the company's 2024/2025 EPS forecast 7%/6% to 0.30/0.33 yuan, and added 0.35 yuan for the company's 2026 EPS forecast. The company has a strong competitive advantage in Wuhan and other places, and its main stores are actively regulating and maintaining a “buy” rating.
Risk warning: Dream Era's sales performance fell short of expectations, and competition in the Hubei retail market intensified.