In the first quarter of 2021, the company's homing net profit increased 160 percent over the same period last year. KuaiBao: the company achieved a net profit of 100.76 million yuan to 116.26 million yuan in the first quarter of 2021, an increase over the same period last year: 160%, 200%, corresponding to an EPS of 0.0723 yuan to 0.0834 yuan. In the same period last year, the company's net profit was 38.75 million yuan, corresponding to 0.0278 yuan in EPS.

In 2020, the company achieved operating income of 2.32902 billion yuan, down 62.83% from the same period last year. The net profit belonging to shareholders of listed companies was 137.12 million yuan, down 56.70% from the same period last year, corresponding to an EPS of 0.098 yuan.

Based on the low base in the first quarter of 2020 and the overall growth of profit income in the first quarter of 2021, in the first quarter of 2020, the company was affected by the COVID-19 epidemic, the passenger flow decreased significantly, and during the epidemic, all the stores under the company suspended business periodically, resulting in a sharp decline in the company's operating income in the first quarter, and a large drop in net profit belonging to shareholders of listed companies. In the first quarter of 2021, under the condition that the epidemic was effectively controlled, the company fully recovered, actively introduced various marketing programs to boost consumption, and significantly improved sales and passenger flow. During the reporting period, the company's operating income and net profit of shareholders belonging to listed companies increased in an all-round way compared with the same period last year.

The performance in 2020 is in line with the forecast, which is greatly affected by the new leasing standards.

In the 2020 performance forecast disclosed on January 30, 2021, the company's net profit is expected to decline by 60%-45% compared with the same period last year. This performance KuaiBao disclosure is in line with the scope of the previous performance forecast. The company's department stores, shopping centers and Olai are mainly joint ventures. according to the provisions of the new revenue criteria, the mode of revenue and cost recognition under the joint venture model has changed greatly. as a result, the operating income, operating cost and gross profit margin of the company's department stores, shopping malls and Olai have changed greatly in 2020, which is not comparable with that of the same period. Excluding the impact of the implementation of the new revenue standards, the revenue of the main business decreased by 6.53% compared with the same period last year, the cost of the main business decreased by 4.98% year-on-year, and the gross profit margin decreased by 1.38 percentage points. In the aspect of impairment test, the company conducted a preliminary impairment test on Ningbo Oupaiyi luxury International Trading Co., Ltd., the invested unit that formed goodwill, and expected to set aside 42.1973 million yuan for goodwill impairment.

Downgrade profit forecast and maintain "overweight" rating

The company's performance is in line with the forecast, considering that the new leasing criteria will have a greater impact on the company's future revenue and profit measurement, we downgrade the forecast for the company's 2020-2021 EPS by 38% to 0.10 won 0.21 yuan, and maintain the company's 2022 EPS forecast of 0.23 yuan. The company's performance in the first quarter of 2021 was optimistic, and PB was at an all-time low, maintaining an "overweight" rating.

Risk hint: the fierce competition in Hunan retail market is intensified, and the training period of new stores is longer than expected.