Rainbow Group (002419): Continued improvement in gross profit margin and in-depth promotion of digital upgrades and supply chain integration
The company announced its semi-annual report for 2019, and its performance was in line with expectations: (1) The revenue in 2019H1 was 96.
76 ppm, an increase of ten years.
Realize net profit attributable to mother 5.
30,000 yuan, an annual increase of 3.
(2) Revenue in the second quarter of 2019 was 44.
98 ppm, a ten-year increase4.
Realize net profit attributable to mother 1.
89 ppm, an increase of ten years.
(3) Two new shopping centers (Foshan Shopping Center, Ji’an 合肥夜网 Chengnan Shopping Center) and 18 convenience stores will be opened in 2019H1.
As of the first half of this year, the company has settled in 25 cities in 8 provinces, with 15 shopping center stores, 68 department store stores, 82 supermarket stores, and 152 convenience stores, with a total area of 3.2 million square meters.
The performance of supermarkets and convenience stores improved, and the margin of department store performance improved.
(1) Comparable store revenue growth of the company in H1 2019 is -0.
72%, with profits increasing by 6 per year.
Same store growth rate increased by 2 compared to 2019Q1.
03pct, the profit growth rate dropped by 0 in early 2019Q1.
(2) The same-store growth rate of supermarket / convenience store / department store / shopping mall was 9 respectively.
06 / -6.
11 / -0.
08%, an increase of 7 over 2018H1.
28 / -8.
79 / -9.
14pct, which is -1 higher than 2019Q1.
00 / -1.
(3) Supermarkets / convenience stores / department stores / mall malls maximize profit growth respectively.
63 / -3.
36/56.64%, an increase of 28 over 2018H1.
36 / -31.
62 / -27.
15pct, previously increased by -9 in 2019Q1.
29 / -21.
The gross profit margin continued to improve to improve the company’s profitability, and the three major expense ratios improved.
The first half of 2019: (1) Gross profit margin 27.
35%, up 1 every year.
2pct, net interest rate 5.
2%, rising by 0 every year.
The gross profit margin of retail business is 26.
92%, rising by 0 every year.
(2) The expense ratio is 21.
63%, rising by 1 every year.
The selling expense ratio is 19.
62%, up by 1 each year.
Management expense ratio 2.
08%, rising by 0 every year.
Finance expense ratio -0.
08%, rising by 0 every year.
11pct is mainly to report the decrease in temporary time deposits.
Promote the three development strategies of digitalization, experience and supply chain.
(1) Strengthen digital customer reach and insight.
The total number of members is about 20.43 million, of which the number of digital members is about 18.82 million.
Developed an online supermarket group business. The joint consumption rate exceeded 50%, and Tianhong’s home sales increased by 46% each year.
(2) Business format upgrades enhance the physical store experience and increase store service value and differentiated characteristics.
Department stores continued to experiment with the first-floor neighbourhood. Other categories of themes were edited and adjusted. The shopping center created a life center for happy hours. Foshan Tianhong Shopping Center opened a sports-themed area. YES Street and children’s themed areas were successfully copied in many places.
(3) Promote category management, and cultivate strategic core commodities such as direct mining at home and abroad, private brands, and service goods.
International direct-growing / fresh direct-growing / private brand / 2R (ready-to-cook) product sales increased 43
0%, to promote the integration of the supply chain, the national millennium supplier agreement 46.
Completed the nationwide logistics warehouse network planning, and reached a cooperation with SF Express on 12 trunk transportation networks between warehouses.
Maintain profit forecast and maintain “Buy” rating.
Through intelligent and digital transformation, combined with the transformation of customer experience in the physical format, the company improved store drainage and profitability, and significantly improved profitability.
Promote digital and intelligent transformation, further improve the shopping experience of consumers, especially member consumers, deepen strategic core products, and create a better alternative supply chain system.
It is estimated that the company’s net profit attributable to the parent from 19 to 2021 will be 10 respectively.
74 trillion, corresponding to EPS are 0.
14 yuan, corresponding to 14/12/11 times the current expected PE. Maintain “Buy” rating.
Risk warning: terminal demand declines, innovation business cultivation period is too long, digital transformation is less than expected, and costs increase too quickly.