\u3000\u3 China Vanke Co.Ltd(000002) 697 Chengdu Hongqi Chain Co.Ltd(002697) )
Event: on April 1, the company announced that in 2021, it achieved a revenue of 9.351 billion yuan / year-on-year + 3.29%, and a net profit attributable to the parent company of 481 million yuan / year-on-year – 4.66%; Deduct the net profit not attributable to the parent company of 439 million yuan / year-on-year – 4.01%; Among them, Xinwang bank contributed 137 million yuan of investment income (106 million yuan in the same period last year). After deducting this contribution of investment income, the growth rate of non attributable net profit deducted from the main business of the company was – 3.09%. Excluding the new lease criteria, the company realized a net profit attributable to the company’s shareholders of 518 million yuan in 2021 / year-on-year + 2.61%; In the fourth quarter of a single year, the net profit of main business deducting non parent company was 668048 million yuan / year-on-year + 40.6%.
Contrarian exhibition store, the compound growth rate of the same store in the past two years was positive, and the revenue grew steadily. 1) Exhibition stores and Revenue: during the reporting period, the company bucked the trend, opened 412 new stores, closed 146 stores, and upgraded 193 old stores. As of the reporting period, there were 3602 stores. 2) The two-year compound growth rate of the same store was positive, with a year-on-year increase of 3.3% in 2019; 3) In terms of revenue by category, the revenue of food / tobacco and alcohol / daily necessities / other businesses was – 3.11% / + 14.38% / – 1.72% / + 17.34% year-on-year respectively. Tobacco and alcohol continued to grow at a high rate. The performance of food and daily necessities was affected by the epidemic, but recovered in the second half of the year; 4) In 2021q4, the company carried out centralized cleaning and integration of stores with poor performance. A total of 124 stores were closed in Q4. Due to centralized processing, the corresponding amortization expense was increased at one time, with an amount of about 5.2 million yuan. In terms of annual revenue, the company achieved steady growth in revenue.
The gross profit margin increased positively year-on-year, the main business increased sharply in Q4, and the operating profit margin remained stable. 1) The company’s gross profit margin performed better. During the reporting period, the company’s comprehensive gross profit margin was 29.7%, with a year-on-year increase of 0.2pct, of which the gross profit margin in the single quarter of 2021q4 increased 3PCT to 29.4%, with obvious optimization (including the impact of changes in the new lease law); 2) The expense rate was relatively stable throughout the year, with a year-on-year increase of + 0.9pct to 25.2%; 3) After restoring last year’s caliber, 2021q4 achieved a single quarter net profit of 668048 million yuan / year-on-year + 40.6%, realizing rapid growth of the main business, while the operating profit margin remained relatively stable throughout the year.
The operating cash flow increased year-on-year, and the profit of Xinwang bank increased year-on-year. 1) In 2021, the company realized operating cash flow of 1.036 billion yuan, 495 million yuan in the same period last year, a significant increase year-on-year. 2) The company’s Xinwang bank realized an investment income of 137 million yuan, a year-on-year increase of + 26.94%.
Investment suggestion: as the leader of China’s scarce large-scale profitable convenience stores, the company has multidimensional growth in exhibition stores, daily sales and gross profit margin; In 2021, despite the impact of the epidemic and relevant policies, the store was still developing against the trend, and the compound growth rate of the same store in the two years was positive, which was better than that of its peers. According to the company’s announcement, in 2022, the company will continue to strengthen the strategic layout of stores in Sichuan and strive to complete the expansion plan of “1000 stores in three years”. It is estimated that the net profit attributable to the parent company of the company’s main business from 2022 to 2023 will be about 397 million yuan / 435 million yuan, the net profit attributable to the parent company will be about 534 million yuan / 572 million yuan, EPS will be 0.39 yuan / share and 0.42 yuan / share respectively, maintaining the “buy” rating, and the target price will be 6.4 yuan / share (corresponding to 20 times PE for the main business in 2023).
Risk tips: 1) the impact of e-commerce diversion far exceeds expectations; 2) Labor and rental costs have increased significantly; 3) Industry competition has intensified significantly.
