\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 729 Chongqing Department Store Co.Ltd(600729) )
Event: the company released the first quarterly report of 2022. In 2022q1, the operating revenue was 5.27 billion yuan / – 19.0%, and the net profit attributable to the parent company was 410 million yuan / – 5.0%. We estimate that after excluding the investment income, the net profit attributable to the parent company of 22q1 will be reduced to 330 million yuan / – 11.2%.
Highlights of financial report: in this quarter, the company’s main business still maintained a certain degree of resilience and continued to optimize its operating efficiency in the face of multiple factors such as the decline of passenger flow in physical stores and shortage of goods caused by epidemic control. On the line, the company continues to improve its online operation ability, and through live broadcast sales, it drives the operation to reach users in multiple scenarios and multiple tentacles. At the store end, the company further adjusted its stores, fully mobilized the upstream supply chain and strengthened the operation ability of members by using digitization, so as to form an efficient match between commodity resources and downstream demand, and the increase of channel premium led to the rise of sales gross profit margin. The impact of the epidemic is mostly short-term disturbance. Looking back, with the continuous optimization of the company’s internal management and the emergence of resource synergy, the mixed reform is expected to further release the space for the company to build new stores and adjust loss making stores, and the company’s operation is expected to move towards a long upward cycle.
Revenue side: in terms of business status, in 2022q1, the revenue from purchasing 100 / supermarkets / electrical appliances / auto trade / others was 890 million yuan / 2.19 billion yuan / 690 million yuan / 1.39 billion yuan / 100 million yuan respectively, with a year-on-year increase of – 15.7% / – 7.4% / + 20.1% / – 39.7% / – 48.6% respectively. The repeated epidemic has affected the operation of offline physical stores led by department stores, and the decline of passenger flow is more obvious. Supermarkets and electrical appliances are relatively rigid, demand toughness is good, and the impact of the epidemic is relatively small. The lack of core in the automotive industry led to the insufficient supply of complete vehicles and parts, with a serious year-on-year decline. By region, in 2022q1, Chongqing / Sichuan / Guizhou / Hubei achieved revenue of 5.11 billion yuan / 140 million yuan / 04 million yuan / 10 million yuan respectively, with a year-on-year increase of – 18.8% / – 28.6% / – 18.9% / – 4.1% respectively. All regions were affected by repeated outbreaks and different degrees of control, and the revenue turned negative year-on-year.
In terms of stores, by the end of 2022q1, the company had 298 stores, 4 new stores (including 4 auto trade stores) and 10 closed stores (including 1 Department Store / supermarket / electrical appliance / auto trade store / 3 stores / 2 stores / 4 stores).
Gross profit margin: in 2022q1, the company realized a gross profit of 1.45 billion yuan, with a gross profit margin of 27.4% / + 3.1pcts. The increase of gross profit margin is mainly due to 1) the company follows up the changes of market demand by strengthening member operation and digital technology, connects the supply chain resources of upstream manufacturers, strengthens the channel premium, and steadily raises the gross profit margin of commodity sales. 2) The decline in the proportion of auto trade sales represented by low gross profit margin has led to an increase in the overall gross profit margin.
Expense side: the company’s rate during 2022q1 was 18.8%, with a year-on-year increase of 2.7pcts. Among them, the sales / management / R & D / Finance rates were 13.6% / 4.5% / 0.2% / 0.5% respectively, with a year-on-year increase of + 1.8pcts / + 0.8pcts / + 0.2pcts /. We believe that the increase of sales and management rates is mainly due to 1) the increase of related costs such as promotion and internal management coordination under the influence of the epidemic; 2) 2022q1 company actively embraced online marketing channels and strengthened the overall planning of department store live broadcasting, resulting in an increase in relevant marketing costs.
Profit side: the company realized a net profit of 430 million yuan / – 4.39% and a net interest rate of 8.1% / + 1.3pcts in 2022q1; The net profit attributable to the parent company was 410 million yuan, a year-on-year decrease of 5.03%, and the net interest rate attributable to the parent company was 7.8% / + 1.3pcts.
Investment suggestion: the impact of the epidemic closure on the department store format is a short-term impact, and the resilience of the department store format under the location advantage is better than others. In the long run, the resource synergy brought by the mixed reform is gradually released in the company’s operation, and has great growth potential in the future. Supermarkets are expected to rise driven by the slowdown of fresh retail competition and CPI. We expect the company to achieve a net profit of 1.15 billion yuan / 1.33 billion yuan / 1.52 billion yuan from 2022 to 2024, maintaining the buy rating.
Risk tip: the development of Internet financial business does not meet expectations, and regional competition intensifies. The development of financial and innovative business is uncertain immediately. The calculation part is calculated through existing assumptions for reference only.
