Rooted in Tohoku, retail is developing collaboratively in multiple business formats. The company implements a multi-business model and has established three major business formats: a department store chain, a supermarket chain, and an electrical appliance chain. Its physical stores, Dashang Tengu Network, Dashang Five-Star Hotel, and Dashang Real Estate form a three-dimensional commercial development pattern.
Expand the channel layout horizontally: expand sales and reduce fees, explore the company's optimization core market benefits. Based in the Northeast region, the company develops retail networks to North China and Southwest China to achieve a diversified, multi-level business layout and multi-format collaborative development. The company's business covers Dalian, Shenyang, Fushun, Daqing, Shandong, Henan and other regions. By the end of 2023, the company currently had 68 department stores, 27 independent supermarkets, and 12 independent electronics stores across the country, bringing the total number of stores to 107. In 2023, the company achieved revenue of 7.331 billion yuan, an increase of 0.75% over the previous year; net profit deducted from mother was 457 million yuan, an increase of 18.97% over the previous year.
Vertical polishing of the single store model: multi-level diversified layout, collaborative development of local retail chains.
In 2023, the company's department store business operation was optimized, refined management improved quality and efficiency, and service projects such as catering, entertainment, and leisure were supported to meet consumer needs in different market environments in different regions. The company's home appliance revenue increased 42.5% year-on-year to 890 million yuan in '23, making it the company's business with strong growth in recent years. At the same time, the company enhances the stickiness of local consumers by building a membership system and strengthening online and offline integration.
Profit forecasting and investment advice. We expect the company to achieve overall operating income of 74.7/76.9/7.88 billion yuan in 2024-2026, a year-on-year change of 1.8%/3.0%/2.5%; in 2024-2026, the company's net profit to mother will be 5.9/6.5/710 million yuan, respectively, with a year-on-year increase of 15.9%/11.6%/7.9% in 2024-2026. Referring to comparable company valuations, and considering the sector's current low overall valuation, the company was given a 2024 13x PE valuation, with a reasonable value of 25.91 yuan/share. For the first time, coverage was given, and a “buy” rating was given.
Risk warning. Macroeconomic risks, the risk of new store expansion and opening less than expected, and the risk that online consumption will have a serious impact on physical retail.