Event
The company released its mid-year report of 2022, with revenue of 1.548 billion yuan, down 63.56% from the same period last year; net profit of 159 million yuan, up 4.99% from the same period last year; and net profit of 40 million yuan, down 66.59% from the same period last year, with basic earnings per share of 0.18 yuan per share.
The epidemic has repeatedly put pressure on the main retail industry, actively exploring new growth points.
Department store retail business: (1) Department store business: under the influence of the continuous outbreak of epidemic situation in Shanghai, Wuxi and other places, the passenger flow of department store business decreases, the flow of goods is blocked, and the operation is under pressure. The company accelerates online business expansion and explores new ways of online and offline integration to expand sales and increase profits. (2) Baiye supermarket: under the influence of the normalization of the epidemic, consumers' purchasing habits have changed, and the rise of new business type, such as convenience stores, community group purchases, fresh e-commerce, etc., has an impact on the operation of the supermarket. The company enhances the fresh and strengthens the store management ability, at the same time strengthens the group purchase to expand the customer, strives for the guarantee supply order and so on, stabilizes the performance. (3) convenience stores: 7-11 convenience stores in Hubei Province were repeatedly affected by the epidemic, so the plan to expand stores was postponed. Four new stores were opened and two were closed in 2022H1. Through promotional activities, takeout promotion, store optimization and other positive measures, the company can improve the rate of members' consumption and the average daily turnover of individual stores. 2022H1's department store retail business achieved an operating income of 356 million yuan, down 6.11% from the same period last year.
Sanfengqiao plate: (1) Sanfengqiao food plate: due to the repeated epidemic situation and logistics control, the loss of occasional group purchase orders and the decline of personnel mobility, March sales were only 56% of the same period. June sales were restored to 81% of the same period. 2022H1 continued to promote the store expansion plan and carry out optimization and adjustment according to the plan, opening six new direct stores and closing two, achieving operating revenue of 69.5258 million yuan, down 20.97 percent from the same period last year. (2) Sanfengqiao catering sector: affected by the epidemic in March and April, sales decreased significantly, and sales in May and June gradually recovered to half the level of the same period. 2022H1 actively develops online services, constantly introducing traffic and strengthening marketing promotion to make up for the short-term revenue gap.
The operating income of 2022H1 Sanfengqiao Restaurant reached 26.3731 million yuan, down 16.54% from the same period last year.
With the improvement of the epidemic, the company's retail business is expected to gradually return to growth.
Acquisition of Jinhua Lianji + Zhibei Medical, continuous Promotion of Orthopaedics + Children's Medical track layout 2022H1 continues to promote the layout of medical and health business, and has acquired Jinhua Lianji Hospital with characteristic orthopedic specialist system and Zhibei Medical of pediatric diagnosis and treatment, which is expected to play a synergistic role. At the same time, the company continues to create a standardized and standardized post-investment medical management model and resource integration platform to promote and continuously optimize the middle and background function management of Junyao Medical and its subordinate institutions, so as to realize the empowerment of operation and management. 2022H1 medical and health business realized operating income of 1.058 billion yuan, accounting for 68.35%, and became the main contributor to revenue.
The gross profit margin of the spin-off of the auto business increased, and the sale of Junxu property increased the annual gross profit margin of 2022H1 by 19.90%, an increase in 5.26pct compared with the same period last year, mainly because the company spun off its low gross margin car sales and service business in 2021.9 (2021H1 gross profit margin was 7.55%). In terms of expense rate, due to the reduction of sales expenses in the disposal of automobile business and the expansion of the optimal management model of medical business, the annual sales expense rate of 2022H1 decreased by 1.40pct to 3.37%, and the management expense rate increased to 9.89% by 4.91pct. 2022H1's net interest rate was 11.56%, an increase in 7.96pct compared with the same period last year, mainly due to the non-recurrent profit and loss of about 92.9 million yuan brought by the company's sale of 21% stake in Junxu Real Estate.
Investment suggestion
In the short term, with the improvement of the epidemic, the commercial retail and food and catering sectors are expected to release performance flexibility; in the long run, the light luxury industry has broad market space, the company continues to adjust and upgrade to improve the efficiency of the flat, and the retail department store business is expected to achieve steady growth. The fresh distribution and convenience store industry ushered in new development opportunities under the catalysis of the epidemic. The company opened fresh and enhanced stores and won 7-Eleven Hubei management right to explore and join the chain expansion model, which is expected to further strengthen the main retail business; the company acquired Gyango Medical, Shuyang Central Hospital, Yahn Health, Zhibei Medical, Jinhua Lianji, cut into the field of medical and health, multi-track linkage capacity, is expected to become a new performance growth point. We estimate that the company's EPS in 2022-2024 will be 0.26,0.30,0.33 yuan per share respectively, and the corresponding share price PE will be 18,16,14 times respectively, maintaining a "buy" rating.
Risk hint
The epidemic situation in some areas is repeated; the expansion of 7-Eleven stores is not as expected; and the cultivation of the medical sector is not as expected.
