Incident: Wangfujing released its 23rd annual report: 1) In '23, the company achieved revenue of 12.224 billion yuan/year over year, +13.19%; 2) 23Q4 achieved revenue of 2,959 million yuan/year over year +26.80%, with a return of 61 million yuan/year over year +127.96%, deducting not 46 million yuan/year over year.
The Ole business followed the trend of cost-effective consumption and achieved rapid growth: 1) By the end of 23, the company had 17 Ole stores. At the end of the year, Olay achieved revenue of 2,034 billion yuan/ +35.09%, and a gross profit margin of 68.72% /+5.49pct. Thanks to the cost-effective and open business characteristics of the Olay business format, revenue and profitability increased significantly in 23 years; 2) In order to seize the Olay market in Beijing's sub-center, the company plans to acquire 15% of Huanhui Real Estate's shares. Travel area commercial supporting complex (east side of Universal Studios) The developer and operator, the company expects the complex project to be completed and put into operation in 2025.
Wangfujing International Duty Free Port opened, actively preparing for Phase 2 and 3: Wangfujing's first outlying islands duty-free project, Wangfujing International Duty Free Port will open to the public on January 18, 2023. The second and third phases are being prepared. The online applet will be launched at the end of January 23. Furthermore, Wangfujing Haiken Shopping Center was unveiled at the end of '23. In '23, the duty-free business achieved revenue of 187 million yuan, of which part of Ole was included in the Ole business format based on rental income, with a gross profit margin of 19.19%. Since the project is still climbing, the Hainan Ole Travel Industry lost 138 million yuan according to financial reports.
The shopping and specialty store business has steadily recovered with the recovery of consumption: 1) Satisfying consumer experiential consumption, shopping malls continued to recover: in 23 years, the company had 29 shopping malls (2 new ones added), with revenue of 2,580 billion yuan/+7.69%, gross profit margin of 49.39% /+1.23pct; 2) Department stores accounted for 42.42% of the company's revenue, achieving revenue of 5.609 billion yuan/ +6.22% in 23, gross profit margin 36.44% /+4.83pct; 3) The company formed a collection of luxury and trendy sports stores Brand franchise There are two main lines of stores, 32 Ruijin Premium stores and 334 Faya Trading stores. The revenue for 23 years was 1,599 billion yuan/ +16.35%, and a gross profit margin of 14.99% /+0.71 pct.
Continuing omnichannel layout and strengthening in-depth member operations: 1) Through operating models such as online shopping malls, new media, short videos, and live streaming delivery, etc., the full integration of omnichannel business scenarios and online and offline delivery was initially promoted, while promoting digital construction and smart store construction, driving online sales to reach 1.44 billion yuan/year over year +60%; 2) The company has 26 million fans, more than 23 million members, and membership consumption accounts for 68%; affected by the gradual recovery in consumption, customer traffic increased by more than 40% year on year, and number of transactions + year over year 40%
Profitability: Achieved gross sales margin of 41.84% /+3.56pct, net sales margin 6.22% /+4.96pct, sales rate 15.16% /-0.59pct, management rate 12.14% /-2.31pct, and financial rate 2.38% /-0.04pct.
Profit forecasting and investment suggestions: The company insists on deepening the retail business, improving the retail ecosystem, and gradually realizing a tax+duty-free two-wheel drive business pattern. We expect net profit to be 917, 10.85, and 1,215 million yuan respectively for 24-26, corresponding to the closing price of April 19 PE of 16, 13, and 12X respectively.
Risk factors: Weak spending power, falling short of expectations in duty-free business, intensifying market competition