2020 performance exceeded our expectations
The company announced its 2020 results: revenue of 9.549 billion yuan,-20.4% year-on-year, + 3.5% year-on-year after excluding the impact of the new revenue criteria. The net profit of homing is 103 million yuan, + 22.4% compared with the same period last year, which exceeds our expectation, mainly because the non-recurrent income is higher than our expectation. Deducting non-net profit of 91.01 million yuan, + 35.1% compared with the same period last year, which is in line with our expectations. On a quarter-by-quarter basis, Q1-Q4 revenue is-18.8% Universe 50.2% Universe 37.3% Universe 27.9%, and net profit returned to its mother is + 35.8% Universe 134.4% Universe 413.1% Universe 163.5%. At the same time, the company announced 1Q21 results, achieving revenue of 2.434 billion yuan,-10.5% year-on-year, and return to the mother net profit of 35.05 million yuan,-46.6% compared with the same period last year.
Trend of development
1. The adjusted revenue for the whole year increased by 3.5% compared with the same period last year. The company's revenue in 2020 was-20.4% compared with the same period last year, mainly because the new revenue guidelines were implemented in 2020, and the operating income was + 3.5% year-on-year after excluding the impact. According to the situation of exhibition stores, 14 new stores were opened throughout the year, and by the end of 2020, the company had 173 stores in Yingmen, a net increase of 10 compared with the end of 2019. From a regional point of view, North China leads the growth rate of store efficiency, with sales of + 20.9% compared with the same period last year, mainly due to the opening of more new stores; central and eastern China and other regions have a large decline in store efficiency, with sales of-20.3% and 15.6% respectively compared with the same period last year, mainly due to the impact of the epidemic. 1Q21's revenue is-10.5% compared with the same period last year, and we expect it to be mainly due to the high base of the main business of Life supermarket in the same period last year.
2. The net interest rate rose slightly in 2020. Company gross margin 2020/1Q21 year-on-year + 5.6ppt/+1.9ppt to 27.9% Universe 30.3% Det 2020 main cause impact. From the expense point of view, the sales expense rate 2020/1Q21 year-on-year + 3.2ppt/-0.4ppt to 21.6% 3.2ppt/-0.4ppt 21.2% the year-on-year impact of removal criteria-1.8ppt to 16.6%, mainly due to fee relief given by the relevant parties; total management and R & D rates 2020/1Q21 year-on-year + 0.8ppt/+0.4ppt to 3.3% 0.8ppt/+0.4ppt to 3.5% the impact of removal criteria in 2020 is basically the same as the same period last year Financial rates year-on-year-0.2ppt/+2.6ppt to 1.1% Universe 3.8%, of which 1Q21 is the main cause of impact. Under the combined influence, the 2020/1Q21 net interest rate is from + 0.4ppt/-1ppt to 1.1% 0.4ppt/-1ppt to 1.4% compared with the same period last year, and the non-net interest rate is deducted from + 0.4ppt/-1.5ppt to 1.0% Universe 1.0%.
3. Follow up to pay attention to the upgrading of the company's business format and the progress of operational efficiency. 1) in terms of format layout, the company distributes 10 strategic areas of high-density development, including high-density and multi-format development of hypermarkets, community stores, member stores and convenience stores. 2) in terms of own brands, the company plans to further increase the speed of differentiated product development, and the company expects to increase the quantity and quality of its own brands by more than 100% in 2021. 3) in the bottom supply chain, the company plans to use the standardized operation of six first-tier warehouses and four second-tier warehouses to empower the front-end stores. In the follow-up, we still need to pay attention to the actual progress of the relevant transformation of the company.
Profit forecast and valuation
Taking into account the pressure on the traditional offline retail format and the change in accounting standards, the earnings per share forecast for 2021 is reduced by 14% to 0.13 yuan, and the earnings forecast per share for 2022 is introduced. The current stock price corresponds to 28 times of 2021 pound in 2022. Maintain a neutral rating. Due to the adjustment of earnings forecast, the target price will be lowered by 15% to 4.05 yuan, corresponding to 31 times Pmax E in 2021 and 2022, which has 9% upside compared to the current stock price.
Risk.
New business type impact, industry competition intensified; the impact of the epidemic exceeded expectations.