Event: The company released its 2023 annual report. (1) The company achieved revenue of 18.99 billion yuan, an increase of 3.7% over the previous year. Achieved net profit of 1.31 billion yuan to mother, an increase of 48.8% over the previous year. Net profit after deducting non-return to mother was 1.13 billion yuan, an increase of 41.7% over the previous year. Gross margin decreased by 0.44 pps to 25.7%, and net profit margin increased by 2.10 pps to 6.9%. (2) In terms of single 23Q4 performance, the company's operating income increased 10.9% year on year to 4.21 billion yuan compared to 22Q4, net profit to mother increased 213.2% year on year to 190 million yuan, net profit after deducting non-return to mother increased 52.3% year on year to 110 million yuan, and net income to mother increased 3.30 pps to 4.4% year on year. (3) In 2023, the company paid a cash dividend of 1.3561 yuan per share, with a total cash dividend of 60 billion yuan, with a dividend ratio of 45.63%.
By industry, in 2023, the company's department store business revenue increased 8.8% year-on-year to 2.01 billion yuan, and gross margin increased 1.74 pps to 66.0% over the previous year. The supermarket business revenue decreased 5.5% year over year to 6.18 billion yuan, and gross margin increased 1.90 pps to 17.4% over the previous year. The revenue of the electrical appliance business increased 19.5% year over year to 2.93 billion yuan, and gross margin decreased by 0.06 pps to 19.8% from the previous year. Auto trade business revenue increased 13.2% year over year to 6.08 billion yuan, and gross margin decreased 1.05 pps to 6.3% from the previous year.
The total number of members of the company exceeded 20 million in 2023, integrated promotion of 4.15 billion yuan across all business formats, and continued optimization of multi-business integrated apps, which is expected to promote future growth. The department store and electrical appliance business deepened joint brand business plans and solidly promoted underwriting customization; supermarkets strengthened industrial collaboration with Wumei Group to give full play to the sales advantages of the TOP brand.
Profit forecasting and investment advice. We expect the net profit of Chongqing Department Store to be 14.7/15.9/1.70 billion yuan in 24-26, with year-on-year growth rates of 11.7%/8.1%/6.9%, respectively. We gave the company a 24-year net profit of 10x PE, corresponding to a reasonable value of 32.78 yuan/share, maintaining a “buy” rating.
Risk warning. Consumption continues to weaken, and offline retail is recovering weakly; traffic in the business district is declining, and the ability of major stores to attract customers is weakening; consumer finance supervision policies are becoming stricter, and consumer finance business will soon be controlled, etc.