Introduction to this report:
The company actively adapts to changes in market and consumer demand, vigorously enhances basic management capabilities, continuously strengthens network layout and business format collaboration, and promotes the high-quality development of the company in the future.
Key points of investment:
Maintain the increase in holdings. Considering the pressure on the industry environment and the development of new businesses, the 2024/25 EPS was reduced to 0.23/0.24 yuan (previous value was 0.54/0.62 yuan). The 2026 EPS will be added at $0.25. With 0.46xPS, which is slightly lower than the industry average in 2024, the target price was lowered to 13.5 yuan (previous value was 14.48 yuan), and the increase in holdings was maintained.
Performance summary: 2023 operating income of 17.763 billion/ -2.31%, net profit of 136.00 million/ +127.04%, net profit of 98.71 million/ +275.56%; 2024Q1 operating income of 5.189 million/ +5.73%; net profit of 147 million/ +7.10%; deducted non-net profit of 136 million/ +1.05%.
Vigorously improve basic management capabilities, and continue to optimize old stores and accelerate the expansion of new stores. Faced with industry difficulties, the company returned to retail itself and paid close attention to basic management such as display, service, and labeling, and the quality of store operations improved markedly. Old stores continue to be upgraded to achieve better performance growth. At the same time, they insisted on opening 12 new direct-run stores in 24Q1 and adding 8 new affiliate stores. By the end of the reporting period, the total number of the company's stores was 1,065, including 67 snack stores and 8 Haohuixing discount stores.
Continue to optimize and innovate business formats, and increase online and offline omnichannel collaboration. Today, there have been major changes on the consumer demand side, and more attention is being paid to cost performance. The company adapted to changes in demand, innovated its business format, launched the snack chain brands “Yueji Snacks” and “Haohuixing Discount Store” to actively expand the market through a combination of self-operation and franchise. At the same time, relying on the sinking store network, the Jiajiayue Fresh platform and third-party platforms were used to build an omni-channel collaborative platform integrating online and offline interaction. In 2024, online business sales accounted for 5.98%.
Risk warning: Macroeconomic downturn, consumer confidence weakens; store expansion is progressing slowly.