In 2020, the same store in the company's supermarket (+ 9.8%) performed well, and the department store recovered quarter by quarter. The company continues to promote the digital construction of users, operations and supply chain. In the future, with the increase in the proportion of mature stores, the improvement of digital level and the efficiency of supply chain, the fundamentals of the company are expected to improve, and the net interest rate is expected to rise to the historical average (2%).
The performance was lower than expected and Q4 lost money in a single quarter. In 2020, the company achieved revenue of 15.64 billion yuan,-20.5% compared with the same period last year (+ 3.7% according to the new standard), and the attributable net profit / deducted non-net profit was 110 million / 90 million yuan, respectively, compared with the same period last year. 2020Q4, the company realized operating income / attributable net profit of 3.48 billion /-60 million yuan, respectively, compared with the same period last year. In 2020, the company realized a net operating cash flow of 1.35 billion yuan,-23.5% compared with the same period last year, mainly due to the increase in operating cash expenditure during the reporting period due to the time difference in payment settlement by suppliers.
The same store in the supermarket has increased rapidly, and the store has expanded steadily. In 2020, the company opened 2 new supermarkets / department stores, closed 15 stores, and withdrew from the Chongqing market as a whole. In 2020, the revenue of the company's supermarket / department store compared with the same period last year was + 9.8% and 13.0%, and the total profit was + 27.4% and 21.2%, respectively. The total profit of the department store was greatly affected by the shutdown of epidemic prevention. By the end of 2020, the company has 420 stores, of which 369 are in supermarket / department store format and 267 in Hunan / other provinces.
The epidemic, exhibition shops and new income guidelines have led to an increase in gross profit margin and expense rate. In 2020, due to the adjustment of accounting standards, the company's consolidated gross profit margin increased from + 6.0pcts to 30.1% compared with the same period last year. In 2019-20, the company opened a total of 100 new stores, resulting in an increase in rigid fees, as well as increased expenses on epidemic prevention materials and store elimination, as well as new accounting standards, resulting in a year-on-year expense rate of + 6.4pct to 29.0% year-on-year, of which the sales / management / financial expense rate was + 5.1/+0.4/+0.8pct to 24.0%, 2.5% and 2.4% respectively compared with the same period last year.
The level of digitization is constantly improving, and the online business is growing rapidly. Digital members: by the end of 2020, the company's digital members have reached 24.7 million, of which 7.36 million are pure new customers, and the sales of digital members have increased by 16.7%. The community covers 357 stores and the number of communities is 38000. Dynamic employment: the proportion of dynamic employment of the company is as high as 60%, and the optimization of personnel in some stores is reduced by 50%, significantly improving labor efficiency. Community group buying and online business:
In 2020, the sales volume of the company's community group buying business was + 42.5% compared with the same period last year, and the overall online GMV was about 6.3 billion yuan.
Looking forward to 2021: digital in-depth cooperation, supply chain change intensified. In 2021, the pressure brought by the Internet giant's layout of community group buying is still great, and the company has both opportunities and challenges: 1) to further deepen the strategic cooperation with Tencent and JD.com; 2) supply chain reform, the company will promote the supply chain reform with processing fresh as the core, expand the user audience and enhance the product value by creating core items, launching master dishes and Spring Festival basin dishes.
Risk factors: the decline of consumer demand; the progress of new store expansion is not up to expectations; the competition in the industry is intensified.
Investment suggestions: taking into account the intensification of industry competition brought about by the new income criteria and community group buying, the operating income for 2021-22 is forecast to be 16.44 billion / 17.23 billion yuan (the original forecast is 25.52 billion / 29.65 billion yuan); the 2021-22 attributable net profit is forecast to be 140 million / 190 million yuan (original forecast is 32,000 million yuan) The new operating income / attributable net profit in 2023 is expected to be 17.92 billion / 250 million yuan, corresponding to 0.16 EPS 0.22 yuan in 2021-23. Considering the valuation of comparable companies in the industry and the gradual improvement of the company's net interest rate, the company is given a target price of 9.6 yuan for 33X PE, in 2023, maintaining a "buy" rating.
