Chang Chun Eurasia Group Co.Ltd(600697) 2021 annual report comments: the performance is lower than expected, promoting the process of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration

\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 697 Chang Chun Eurasia Group Co.Ltd(600697) )

In 2021, the company’s revenue increased by 4.38% year-on-year, and the net profit attributable to the parent company increased by 24.60% year-on-year

On April 12, the company released its annual report for 2021: in 2021, the operating revenue was 8.352 billion yuan, with a year-on-year increase of 4.38%, and the net profit attributable to the parent was 28 million yuan, which was converted into fully diluted EPS of 0.18 yuan, with a year-on-year increase of 24.60%, and the net profit deducted from non attributable to the parent was – 31 million yuan.

In terms of single quarter split, 4q2021 achieved an operating revenue of 2.061 billion yuan, a year-on-year decrease of 12.40%, a net profit attributable to parent company of -41 million yuan, equivalent to a fully diluted EPS of -0.26 yuan, and a deduction of non attributable net profit of -77 million yuan.

In 2021, the company’s comprehensive gross profit margin decreased by 1.28 percentage points, and the period expense rate increased by 0.03 percentage points. In 2021, the company’s comprehensive gross profit margin was 40.44%, a year-on-year decrease of 1.28 percentage points. In terms of single quarter split, the comprehensive gross profit margin of 4q2021 company was 40.24%, down 2.80 percentage points year-on-year.

In 2021, the company’s expense ratio was 34.47%, with a year-on-year increase of 0.03 percentage points, of which the sales / management / financial expense ratio was 8.04% / 20.55% / 5.88% respectively, with a year-on-year change of -0.54 / + 0.79 / – 0.22 percentage points respectively. 4q2021’s expense rate during the period was 37.80%, with a year-on-year increase of 4.70 percentage points, of which the sales / management / financial expense rate was 8.27% / 22.96% / 6.57% respectively, with a year-on-year change of -0.33 / + 3.42 / + 1.61 percentage points respectively.

Improve the construction of self operated and self purchased supply chain and enrich the company’s online marketing activities

In 2021, the company opened three new stores (supermarket chain Gonghui store, Tianfu Road store, forestry home store of Shuangliao Eurasian Shopping Center Co., Ltd.) and closed one store (olive community store) when the property lease expired. By the end of 2021, the company had purchased more than 34000 varieties in supermarkets, household appliances, cosmetics and other main sales sectors, with a total purchase amount of more than 5 billion yuan, and newly developed 42 bases for vegetables, fruits, meat and aquatic products. Online, with the help of Chang Chun Eurasia Group Co.Ltd(600697) applet, the company developed Eurasian home online shopping, and co branded companies carried out live broadcasting activities, including “live broadcasting with goods”, “community group” and other activities.

Cut the profit forecast and maintain the “overweight” rating

The company’s performance was lower than expected, mainly due to the credit impairment loss of 10.77 million yuan in 2021. In view of the serious epidemic situation in Jilin, the company’s main business location in the first quarter of 2022, and there is still great uncertainty in the recovery process of the epidemic situation, we lowered the prediction of the company’s EPS in 20222023 by 49%/ 51% to 0.15/0.17 yuan, and added 0.19 yuan to the prediction of the company’s EPS in 2024. The company has certain regional advantages in Jilin, actively builds a supply chain, promotes the company’s Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration process, and maintains the “overweight” rating.

Risk tip: the regional economic growth does not meet expectations, and the operation of the main store Eurasia stores does not meet expectations.

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