费用端：公司23 年期间费用率为22.40%，同比+0.15pct。其中，销售费用率为18.85%，同比+0.19pct；管理费用率为2.12%，同比+0.07pct；财务费用率为1.36%，同比-0.20pct；研发费用率为0.07%，同比+0.07pct。24Q1期间费用率为20.06%，同比-0.46pct。其中，销售费用率为16.92%，同比-0.17pct；管理费用率为1.85%，同比-0.11pct；财务费用率为1.23%，同比-0.13pct；研发费用率为0.06%，同比-0.04pct。The company publishes the 2023 annual report and the first quarter of 2024. In 2023, the company achieved revenue of 17.763 billion yuan -2.31% year-on-year, and net profit of 136 million yuan +127.04% year-on-year. This is mainly due to the improvement in the company's operating efficiency and profitability, as well as the decisive closure of stores that continue to lose money while steadily advancing the existing regional network layout. 24Q1 achieved revenue of 5.189 billion yuan +5.73% year-on-year, mainly due to 24Q1 sales growth and additional stores; net profit to mother of 147 million yuan +7.10% year-on-year, mainly due to sales growth and cost rate decline in 24Q1.
Revenue side: By product, the company achieved revenue of 70.49, 86.87, and 616 million yuan in fresh, food, and department stores in '23, respectively, -7.49%, +2.46%, and -1.16% compared with the same period last year. By region, Shandong Province and regions outside the province achieved revenue of 136.26 billion yuan and 2,727 billion yuan respectively, -3.45% and +4.49% year-on-year.
On the gross margin side: The company's gross sales margin in '23 was 23.88%, +0.63pct year on year, 24Q1 gross sales margin was 24.04%, and -0.62pct year on year.
Cost side: The company's expense ratio for the 23-year period was 22.40%, +0.15pct year-on-year. Among them, the sales expense ratio was 18.85%, +0.19pct; the management expense ratio was 2.12%, +0.07pct year on year; the financial expense ratio was 1.36%, -0.20pct year on year; and the R&D expense ratio was 0.07%, +0.07pct year on year. The cost rate for the 24Q1 period was 20.06%, -0.46pct year-on-year. Among them, the sales expense ratio was 16.92%, -0.17pct; the management expense ratio was 1.85%, -0.11pct; the financial expense ratio was 1.23%, -0.13pct; and the R&D expense ratio was 0.06%, -0.04pct year on year.
Adapt to changes in consumer demand, utilize supply chain capabilities and scale advantages, and continue to innovate business formats.
In '23, the snack chain brands “Yueji Snacks” and “Haohuixing Discount Store” were launched to expand the market through a combination of self-operation and franchise, which is conducive to further enhancing the company's advantages of regional concentration and multi-format collaboration.
Furthermore, on the basis of maintaining quality stores, the company further optimizes the store structure, and increases efforts to close stores that lose money and cannot be improved in the future, reducing losses and improving overall profitability. In '23, 110 new stores in various business formats were opened, and in 24Q1, 20 new stores in various business formats were opened. By the end of March '24, the company had a total of 1,065 stores, including 999 direct-run stores and 66 franchise stores. By business type, there were 261 comprehensive supermarkets, 409 community fresh food supermarkets, 227 rural supermarkets, 67 snack stores, 8 Haohuixing discount stores, and 93 convenience stores.
Firmly promote innovation and transformation to improve operational efficiency and consumer experience. In '23, the online supermarket business accounted for 5.98% of sales. The logistics “scheduled delivery” project was launched, and the on-time delivery rate of delivery vehicles reached more than 80%. Online and offline integration was continuously strengthened, and online sales increased by 23.9%, driving 3.06 million offline visitors. The conversion rate to the store reached 35%, and omni-channel operation capabilities continued to increase, creating a better experience for consumers.
Investment advice: In 24 years, the company will continue to seize stock to improve the quality and efficiency of stores; at the same time, accelerate the development of new business formats such as Haohuixing Discount Store and Yueji Snack Shop, and focus on developing franchises to optimize the single-store model.
In terms of products, the base will be the core to build an integrated international and domestic fresh food supply chain system.
Considering the current consumption environment, we adjusted net profit to mother for 24/25/26 to be 2.5/3.5/49 billion yuan, respectively (the value before 24/25 was $35/41 million), corresponding to 27/19/14xPE, maintaining the “gain” rating.
Risk warning: operating risk, net store opening falls short of expectations, new business format development falls short of expectations, etc.
