\u3000\u3 China Vanke Co.Ltd(000002) 697 Chengdu Hongqi Chain Co.Ltd(002697) )
Event: on April 13, the company announced that the revenue of 2022q1 was 2.441 billion yuan / year-on-year + 7.99%, and the net profit attributable to the parent company was 122 million yuan / year-on-year – 1.58%; Deduct the net profit not attributable to the parent company of 117 million yuan / year-on-year – 4.73%; Among them, Xinwang bank contributed 21 million yuan of investment income (33 million yuan in the same period last year). After deducting this contribution of investment income, the growth rate of non parent net profit deducted from the company’s main business was 9.12%, and the performance was in line with expectations.
Stores continue to adjust and the same store is stable. 1) Exhibition stores and Revenue: in 2021, the company bucked the trend, opened 412 new stores, closed 146 stores, upgraded 193 old stores, and continued to adjust stores in 2022q1; 2) The same store is stable and better than peers.
The gross profit margin and operating profit margin remained stable, and the performance was in line with expectations. 1) The gross profit margin of the company is stable. During the reporting period, the comprehensive gross profit margin of the company was 29.7% / year-on-year -0.2pct; 2) During the period, the expense rate decreased from – 0.2pct to 24.5% year-on-year, of which the sales expense rate / management expense rate / financial expense rate increased from – 0.1pct / – 0.3pct / + 0.2pct to 22.5% / 1.2% / 0.8% year-on-year respectively; 3) During the reporting period, the company realized a net profit of 100 million yuan / year-on-year + 9%. The operating profit margin remained stable and the performance was in line with expectations. The operating cash flow increased positively year-on-year, and the investment income contributed by Xinwang bank decreased year-on-year. 1) In 2022q1, the company realized operating cash flow of 137 million yuan, compared with – 128 million yuan in the same period last year, which was significantly optimized. The main reason was that the company gradually cleaned up and integrated the stores and purchased stores that could not be improved in the short term in the surrounding passenger flow environment at the end of last year, and achieved good results after adjustment; 2) The company’s Xinwang bank realized an investment income of 21 million yuan, with a year-on-year increase of – 32.59%. The net increase of loans was large, the corresponding provision was withdrawn, and the profit decreased.
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.
