Matters:

On September 23, the company announced that its wholly-owned subsidiary Guangdong Juncai International plans to acquire 29.4% of Yonghui Supermarket's shares held by Dairy Company, JD World Trade, and Suqian Hanbang (a joint actor of JD) for 6.27 billion yuan in cash, making it the largest shareholder of Yonghui Supermarket.

Guoxin Retail's opinion: After the company acquires Yonghui Supermarket and becomes the majority shareholder, the two major retail giants are expected to reshape the offline retail pattern in the long term under strategic collaboration. However, Yonghui Supermarket is currently in a period of adjustment and transformation. Uncertainty in performance may drag down Mingchuang's financial reporting side performance. Recent stock price trends of Mingchuang also reflect pessimistic expectations in some markets. We believe that in the short term, the company's core development will continue to focus on the main retail industry, and its development guidelines will remain unchanged in the next 5 years, and the pace of future product IP and overseas expansion is clear; in the medium to long term, Yonghui's acquisition is expected to enable Mingchuang's main domestic business store development and expand the company's offline retail influence. Yonghui's own regulation is also progressing in an orderly manner, and if it returns to growth in the future, it will also bring incremental growth to the company. Considering that the acquisition will be completed in the first half of next year, there will be no impact on the company's profit this year. At the same time, we will not consider the impact on investment income and maintain the company's 2024-2026 net profit of 2.755/3.33/3.958 billion yuan, corresponding to PE of 11/9/8x, maintaining a “better than market” rating.