\u3000\u3 China Vanke Co.Ltd(000002) 697 Chengdu Hongqi Chain Co.Ltd(002697) )
The company’s revenue in the first quarter of 2022 was 2.441 billion yuan (+ 8.0%), and the net profit attributable to the parent company was 122 million yuan (- 1.6%)
The company released its first quarterly report: in 2022q1, it achieved a revenue of 2.441 billion yuan (+ 8.0%), a net profit attributable to the parent company of 122 million yuan (- 1.6%), and a stable operating performance. We believe that the company has built regional competitive advantages in the field of convenience stores, accelerated the exhibition of stores and promoted sustainable growth. We maintain the previous profit forecast unchanged. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 532 / 591 / 655 million, corresponding to EPS of RMB 0.39/0.43/0.48, and the current share price corresponding to PE of 13.7/12.4/11.2 times, maintaining the “buy” rating.
The operation of the main business improved, and the profit decreased slightly year-on-year, which was mainly affected by the fluctuation of investment income
In 2022q1, the company realized a net profit attributable to the parent company of 122 million yuan, a slight decrease year-on-year, mainly due to the impact of investment income fluctuations (during the reporting period, the net profit of investing in Xinwang bank and Gansu Hongqi was 21 million yuan, a year-on-year decrease of 32.6%). If this part of investment income is deducted, the company will realize a net profit attributable to the parent company of 101 million yuan (+ 9.1%), and the operation of its main business will be better as a whole. In terms of profitability, the comprehensive gross profit margin of 2022q1 company was 29.7% (- 0.2pct), basically flat and stable. In terms of expenses, the sales / management / financial expense ratio of 2022q1 company was 22.5% / 1.2% / 0.8% respectively, with a year-on-year increase of – 0.1pct / – 0.3pct / + 0.2pct respectively, and the expense ratio remained stable as a whole. In terms of cash flow, the net cash flow from operating activities of the company in 2022q1 was 137 million yuan (+ 1172.5%), which increased significantly, mainly due to the effectiveness of the company’s liquidation and integration of stores at the end of 2021 and the steady increase of store sales.
Deeply cultivate the convenience store industry, build 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, the company continued to radiate to the surrounding areas with Chengdu as the center, opening 412 new stores throughout the year. By the end of 2021, the total number of stores had reached 3602, forming the advantage of network layout. At the same time, it is planned to maintain a rapid expansion speed in 2022 and 2023. In addition to store expansion, the company adheres to the differentiated competition strategy of “goods + services”, continuously optimizes the commodity structure and enriches the content of value-added services; 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.
