\u3000\u3 China Vanke Co.Ltd(000002) 697 Chengdu Hongqi Chain Co.Ltd(002697) )
The company’s revenue in 2021 was 9.351 billion yuan (+ 3.3%), and the net profit attributable to the parent company was 481 million yuan (- 4.7%). The company issued an annual report: the revenue in 2021 was 9.351 billion yuan (+ 3.3%), and the net profit attributable to the parent company was 481 million yuan (- 4.66%). If the impact of the new leasing standards is excluded, the net profit attributable to the parent company after reduction is 518 million yuan, a year-on-year increase of + 2.61%; The revenue of 2021q4 alone was 2.351 billion yuan (+ 4.7%), and the net profit attributable to the parent company was 132 million yuan (+ 29.6%), showing an obvious improvement trend month on month. We believe that the company has built a regional competitive advantage in the field of convenience stores and continued to develop stores rapidly to promote growth. Taking into account the impact of market environment changes, new store cultivation and other factors, we lowered the company’s profit forecast for 20222023 and added a new profit forecast for 2024. It is estimated that the net profit attributable to the parent company in 20222024 will be 532 (- 0.36) / 591 (- 0.45) / 655 million yuan, the corresponding EPS will be 0.39 (- 0.03) / 0.43 (- 0.03) / 0.48 yuan, and the corresponding PE of the current stock price is 12.5/11.3/10.2 times. The valuation is reasonable and the “buy” rating will be maintained.
The operating conditions continued to improve month on month, and the decline in profits was due to the impact of relevant policies and accounting standards
In terms of business, the growth rate of the company’s food / alcohol / daily necessities / other business revenue in 2021 was – 3.1% / + 14.4% / – 1.7% / + 17.3% respectively. In terms of profitability, the company’s comprehensive gross profit margin in 2021 was 29.7%, a year-on-year increase of + 0.2pct; Among them, the gross profit margin of commodities decreased slightly, mainly due to the challenge of market environment and the impact of profit giving consumers. In terms of expenses, the company’s sales / management / financial expense ratio in 2021 was 23.1% / 1.3% / 0.8% respectively, with a year-on-year increase of + 0.7pct / – 0.3pct / + 0.5pct respectively. Among them, the financial expense ratio increased more, mainly due to the impact of the new leasing standards. In addition, the company’s investment income in Xinwang bank in 2021 was 137 million yuan, making a significant contribution to the financial sector.
Deeply cultivate the convenience store industry, build deep competitive advantages, and adhere to the differentiation strategy of “goods + services”
The company is deeply engaged in the convenience store industry, relying on regional scale advantages, efficient supply chain and mature store operation and management ability to deeply build competitive barriers. In 2021, with Chengdu as the center, the company radiated and intensively opened stores in the surrounding areas. 412 / 266 new / net stores were opened throughout the year, of which most of the stores were closed due to the company’s clean-up and integration of some inefficient stores. In addition, 193 old stores were upgraded; By the end of the reporting period, the total number of stores of the company had reached 3602, forming the advantage of network layout. In addition to store expansion, the company adheres to the differentiated competition strategy of “goods + services”, and achieved service-related revenue of 675 million yuan (+ 17.3%) in 2021; Combined with the supply chain and logistics system, it has gradually developed into the Internet plus modern technology chain corporation, which is “cloud platform, big data + commodity + community service + finance”.
Risk tips: market competition intensifies, the operation of new stores is less than expected, and the investment income of Xinwang bank fluctuates.
