Overview of events

The company released its quarterly report for 2022, with revenue of 391 million yuan, an increase of 13.29% over the same period last year, a net profit of 226 million yuan, an increase of 33.53% over the same period last year, and a deduction of 218 million yuan for non-net profit, an increase of 8.22% over the same period last year. In terms of cash flow, the net cash flow generated by operating activities was 210 million yuan, an increase of 3.96 per cent over the same period last year.

Analysis and judgment:

Revenue side: it is less affected by the epidemic and the operation remains normal.

In 2022, Q1, the company achieved revenue of 391 million yuan, an increase of 13.29% over the same period last year and a decline of 4.34% from the previous month. In 2022, Q1, the company's business activities were less affected by the epidemic. The company has been ploughing the regional market for many years and holds a mature property construction area of more than 1.1 million square meters in the core business district of the central city of Chengdu. The above-mentioned self-owned property ports have superior location, mature supporting environment, convenient and fast transportation, and are more attractive to merchants and final consumers in Chengdu, Sichuan Province and some western regions. At the same time, the company will also speed up the development of chain projects to explore and extend the commercial value of Fusemi. And around the "home demand" and "home consumption", vigorously develop the pan-home industry.

Profit side: a substantial increase in net interest rate

On the profit side, Q1 in 2022, the company achieved a gross profit margin of 72.05%, a year-on-year decline of 2.2pct, a month-on-month increase of 3.81pct; the company achieved a net profit of 59.58%, an increase of 9.13pct and an increase of 4.69pct. On the expense side, Q1 in 2022, the expense rate during the company period was 4.81%, an increase in 1.15pct compared with the same period last year. Among them, the sales / management / financial expense rates were 0.38%, 4.45% and-0.02% respectively, with year-on-year changes of 0.29,0.63 and 0.23pct. The increase in the financial expense rate is mainly due to the decrease in the average balance of bank deposits in the current period compared with the same period last year, resulting in a decline in deposit interest income. In addition, during the reporting period, the company's fair value change income increased by 100.89%, mainly due to the large fluctuation of the fair value during the period of the trading financial assets held in the previous period, and the negative fair value change income recognized in the current period. the transactional financial assets were disposed of last year and realized income.

Investment suggestion

Stimulated by the urbanization rate and rising income, household demand will continue to release. As the leader in Chengdu, the company's first-mover advantage will continue to benefit. The company is positioned as a pan-home integrated service provider and tries to expand its business around the layout of the industrial chain. We keep the company's profit forecast unchanged, with operating income of $1,725,074 million in 2022-2024 and EPS of $1.36x1.47 in 2022-2024, corresponding to the closing price of $11.57 per share on April 27, 2022, with a PE of 7.897.3 times, respectively, maintaining the company's "buy" rating.

Risk hint

1) Real estate sales fell short of expectations, resulting in weaker household demand. 2) the competition in Sichuan household retail market is intensified. 3) the investment return of the company is lower than expected.