Hefei Department Store (000417): 1Q19 net profit increased by 5.

7% concerned about the progress of SOE reform

Hefei Department Store (000417): 1Q19 net profit increased by 5.

7% concerned about the progress of SOE reform

The first quarter of 2019 results are in line 北京夜网 with expectations. The first quarter of 2019 results announced by Hefei Department Store: operating income of 35.

31 trillion, an increase of 9 in ten years.

58%; net profit attributable to mother 1.

2 billion, an increase of 5 in ten years.

74%, net of non-attributed net profit1.

1.0 billion, downgraded by 9 every year.

48%, corresponding profit 0.

15 yuan / share, basically in line with expectations.

Development trend 1.

The prosperity of the retail industry has picked up, and the company’s revenue has improved and accelerated.

In the first quarter of 19, the company’s revenue increased by 9 in ten years.

6%, a quarter-on-quarter increase in revenue growth of 0.

5ppt, the performance of the revenue side is picking up, mainly due to the company’s active promotion of the expansion of new retail stores in 2018, the layout of 30 new outlets, the new operating area of nearly 200,000 square meters, while optimizing the adjustment of the department store format, Lakeshore Joy City, ParkWeirao Life Plaza and other projects were successively opened.

We believe that in the context of the increase in the consumer confidence index of Q1 in 2019 and the steady recovery of the company, the new stores established by Hefei Department Store in 2018 have contributed significantly to the new format. The company’s 2019 revenue is committed to maintaining rapid growth momentum.
2.

The gross profit margin increased significantly, and the expense ratio decreased during the period.

In the first quarter of 19, the company’s gross profit margin increased significantly for the time being2.

4ppt to 20.

7%, mainly due to the company’s implementation of the consumer product chain upgrade strategy in 2018, actively promoting the supply chain management of goods, the construction of digital platforms, and the establishment of three major retail centers in central Anhui, southern Anhui, and northern Anhui to further optimize commodity procurement management and strengthen cost control capabilities.
In addition, during 1Q19, the company’s expense ratio decreased by zero.

1ppt to 11.

7%, of which sales / management / financial expense ratio +0 respectively.

0ppt / -0.

2ppt / + 0.

1ppt to 3.

7% / 7.

8% / 0.

15%, the company’s expense control will still have room to improve in the future.

The company’s net profit margin decreased slightly due to the increase in the coefficient ratio and the minority shareholders’ profit and loss.

1ppt to 3.

4%.

3.

Pay attention to the construction of agricultural product logistics parks and the progress of state-owned enterprise reform.

1) The company’s announcement in December 2018 plans to contribute 12.

The construction of Chizhou’s top 100 agricultural product logistics parks with a construction period of 3 years and a transaction value of USD 6 billion after the operation matures will be completed. The gradual improvement of the company’s agricultural product logistics parks in the province will bring continuous growth to the company’s revenue.

2) Hefei Department Store, as the regional retail leader controlled by Hefei SASAC, carried 西安耍耍网 out the deepening of state-owned enterprise reform, continuously improved its cost control and operating efficiency, and promoted a good profit. Earnings Forecast We maintain our 2019 / 20E earnings forecast of 0.

32/0.

34 yuan is unchanged.

It is estimated and recommended that the company can currently sustain 17/16 times P / E of 2019/20 and maintain the recommended rating and target price of 7.

0 yuan is unchanged, corresponding to 21 in 2019/20.

8/20.

6x P / E, 27% growth potential compared to current expectations.

The risk consumption boom is down; industry competition is intensifying.

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