The company's 1Q2024 revenue increased 0.20% year on year, and net profit to mother increased by 40.81% year on April 29. On April 29, the company announced its 2024 quarterly report: 1Q2024 achieved operating income of 1,944 billion yuan, up 0.20% year on year, and realized net profit of 13 million yuan, equivalent to fully diluted EPS of 0.08 yuan, up 40.81% year on year, achieving net profit deducted from mother of 0.05 billion yuan, a year-on-year decrease of 35.98%. Among them, in February 2024, the Eurasian subsidiary supermarket chain received 11.85 million yuan in government subsidies.
The company's 1Q2024 comprehensive gross margin decreased by 3.84 percentage points, and the cost ratio decreased by 3.87 percentage points during the period 1Q2024. The company's comprehensive gross margin was 37.49%, down 3.84 percentage points from the previous year.
The 1Q2024 company's expense ratio for the period was 30.93%, down 3.87 percentage points year on year. Among them, sales/management/finance expense ratios were 10.18%/14.95%/5.80%, respectively, with a year-on-year change of +2.68/ -5.94/-0.60 percentage points, respectively.
Revenue from the Buy100 business also increased by 7.65%. The supply chain system was continuously improved, and the 1Q2024 company had no changes in stores. By the end of the first quarter of 2024, the company had 146 stores. By business type, the company's retail revenue all achieved positive year-on-year growth. Among them, the highest year-on-year growth rate of shopping center (department store) revenue was 7.65%, while revenue from large integrated stores and supermarket chains increased 2.33% and 1.38%, respectively. However, from a gross margin perspective, the gross margin of shopping malls (department stores) and supermarket chains declined more year over year, by 7.33 and 7.47 percentage points, respectively.
On the business side, in 2023, the company's Eurasian Business Capital Series provided resource support for leading brands, implemented systematic support for key brands, implemented targeted support for weak brands, further upgraded membership services, and launched exclusive customized services such as star coffee break lounges, image customization centers, worry-free shopping spaces, and VIP social clubs. The Eurasian store series shapes an indoor ecological plaza, incorporating natural elements such as greenery, cute pets, and waterfalls into the shopping center to create a place for consumers to check in for influencers. The commercial chain series sorts out contracts, adjusts supplier cooperation terms, and creates performance growth points through business such as group purchases. By the end of 2023, the company's Shangdu series fresh procurement channels had been developed and cooperated with 31 production sites in 8 provinces, and the store series had covered 161 brands of fresh fruits and vegetables, drinks, care and washing, etc.
Maintain profit forecasts and maintain “buy” ratings
The company's performance is basically in line with our previous expectations. We maintain our 2024/2025/2026 EPS forecast of 0.14/0.15/0.16 yuan. The company has a strong competitive position in Changchun and other places. The main offline stores continue to optimize the shopping experience and maintain a “buy” rating.
Risk warning: Regional economic growth falls short of expectations, and the operating conditions of major stores in Eurasia have fallen short of expectations.