Core point of view
Shang Chao industry to anti-cyclical bottom, channel change period to meet the challenge from the community group purchase. Shangchao has been developing in China for more than 30 years. After the early rapid development, it has been facing more and more online challenges since 2013. Shang Chao products are mainly selected consumer goods, which makes the industry have anti-cyclical attributes and strong stability, but the Shang Chao industry is essentially a channel, and the homogenization of products leads to efficiency becoming the focus of competition. Since 2020, the rapid rise of community group buying, at this stage, the profit model of community group buying still does not have an overwhelming advantage over Shang Chao. As the basic point of channel competitiveness of the two is to optimize costs and supply cost-effective products, competition or maintain a long-term nature.
The company is the aggregator of the hypermarket, and the traditional format is actively transformed in the face of bottlenecks. Over the years, the company has always maintained the first market share of the super industry, the national layout of a comprehensive hypermarket, a solid leading position. With the weakening trend of the hypermarket industry, the company is actively transforming to a small format, and plans to expand 30-50 medium-sized supermarkets and 200-300 small supermarkets in 2021. There are differences in the profit models of the three different business formats of large, medium, small and medium-sized businesses, which put forward higher requirements for the company at the operational level. The company replaces long-term passenger flow with short-term profits and continues to increase the growth space in the future.
Alibaba the backbone of the new retail territory, omni-channel development from defense to attack. Alibaba formally took control of the company in 2020 and dispatched management to dock the business cooperation between the two sides. As a retail giant with an annual income of nearly 100 billion yuan, the company plays an important role in Ali's new retail territory and has an increasingly close cooperation with many of Ali's business lines. After 2021, the company will comprehensively shift from defense to attack and vigorously develop omni-channel, B2C business development momentum is excellent, order volume and customer unit price are expected to continue to rise; B2B business 20 years affected by the epidemic, the future development back to the right track; community group purchase business Feiniu group purchase, post purchase go hand in hand, the preliminary layout of the site has been completed, the future is expected to erupt.
Financial Forecast and Investment suggestion
We forecast that the total income of the company from 2021 to 2023 is 1010 yuan, 1080 yuan and 115.4 billion yuan respectively, and the net profit returned to the parent is 27.76,29.76 and 3.255 billion yuan respectively, corresponding to the corresponding EPS of 0.29,0.31,0.34 yuan. The comparable company's relative valuation gives the company 23XPE in 2021, corresponding to the target price of HK $8.00 per share, covering the "overweight" rating for the first time.
Risk hint
The new retail reform is not as expected; the impact of the epidemic continues; the competition in the industry intensifies; and the macroeconomic situation changes.