Rainbow Group (002419): The overall operation in the first three quarters was slightly lower than expected, but the mandatory format and the performance of newly opened stores remained bright. Recommended

Rainbow Group (002419): The overall operation in the first three quarters was slightly lower than expected, but the mandatory format and the performance of newly opened stores remained bright. Recommended

1.Event summary The company achieved operating income of 140 in the first three quarters of 2019.

75 ppm, an increase of 1 per year.

75%; realize net profit attributable to shareholders of listed companies.

52 ppm, a reduction of 3 per year.

15%; Realize attributable non-net profit 5.

61 ppm, a decrease of 4 from the same period last year.

86%.

Net operating cash flow 3.

66 trillion, a decrease of 65 over the same period last year.

93%.

2.Our Analysis and Judgment (I) Newly opened stores have driven the growth of retail business slightly. Supermarkets / convenience stores and other mandatory consumer formats have the same performance in the first three quarters of 2019. The company achieved main business revenue of 135.

68 ppm, an increase of about 1 from the same period last year.

78 ppm, a 10-year increase1.

33%.

Among them, the retail sector achieved 131.

3.6 billion revenue, an increase of about 0 compared with the same period last year.

8.7 billion, of which comparable store revenue compared with the same period last year.

5.7 billion.

Divided by industry type, the company’s department store / supermarket / shopping center / convenience store revenues of comparable stores in the first three quarters changed by -7 from the same period last year.

42/4.

87/2.

97/0.

2.2 billion, a five-year growth of -5.

64% / 9.

20% /-0.

17% / 7.

83%.

In the first three quarters of the company’s comparable store revenue segmented slightly, about 1.

The $ 4.4 billion retail business revenue increase comes from the company ‘s newly opened store operations; as for the real estate sector, revenue in the first three quarters of this year4.

33 ppm, an increase of 0 from the same period last year.

92 ppm; other businesses provide revenue increase of approximately 0.

6.4 billion.

It can be seen that the company’s main incremental retail business in the first three quarters benefited from newly opened stores.

Divided by region, the first three quarters of retail sales in Southern China / Central China / Southeast / East China / Beijing / Chengdu have changed by -1.

15/2.

14/0.

33 / -0.

37 / -0.04 / -0.

40,000 yuan, the changes in the ten years were -1.

37% / 9.

57% / 3.

08% /-4.

28% / -0.

96% /-3.

93%.

Among them, the company ‘s main theater, South China, contributed 82 in the first three quarters.

5.1 billion, accounting for 62 of the retail business revenue.

82%, a decrease of 1 compared with the same period last year.

30 units; retail business contribution ranks second in the first three quarters of Central China’s revenue contribution revenue.

520,000 yuan, accounting for 18 of the retail business revenue.

67%, an increase of 1 compared with the same period last year.

52 singles, it can be seen that the company’s Central China has been gradually improving.

Divided by business model, self-operated / associated / leased comparable stores respectively achieved operating income in the first three quarters of this year42.

81/69.

50/12.

400,000 yuan, corresponding to a change of 4.

25 / -6.

22/2.

40 ppm with a one-year change of 10.

48% /-7.

42% / 13.

33%.

The proportion of joint venture revenue in comparable store revenue (excluding convenience stores) was 55.

73%, the proportion of revenue decreased 4 compared with the same period last year.

99 units; self-employed revenue accounted for 34.

33%, an increase of 3 over the same period last year.

41 units.

The company achieved net profit attributable to mothers in the first three quarters6.

52 ppm, a reduction of 0 per year.

21 ppm, a decrease of 3 per year.

15%; in the first three quarters of this year, the company’s return to its mother company deducted non-net profit5.

61 trillion, a decrease of 0 compared with the same period last year.

29 trillion, a decline of 4 a year.

86%.

The company’s non-recurring profit and loss in the first three quarters of this year totaled 9111.

730,000 yuan, of which the profit or loss of entrusting others to invest or manage assets is 8,587.

670,000 yuan, accounting for 94% of non-recurring gains and losses.25%.

The company continued to adjust the store format and increase the experience format area, and the profit of comparable stores continued to grow.

00%, a decrease of 14 over the previous year.

57 single; of which 54.

The profit of department stores with 38% comparable store revenue increased by 5%.

18%, followed by a total of (38.

21%) The profits of supermarkets have increased significantly13.

44%, both are still the company’s main revenue source; shopping mall format (accounting for same-store revenue 6).

52%) and convenience store formats (accounting for 0 of same-store revenue).

89%), even the scale is small, but the profit scale is increased by 59 each year.

19% / 94.

73%, maintaining rapid growth.

The same-store sales data can be grinded, the company’s mandatory consumption channels and experiential shopping malls are profitable, and the department store business continues to be sluggish, and it will be transformed and upgraded in the future.

(2) Comprehensive gross profit margin increased by 1.

32pct, the cost rate increased by 1.

73pct’s consolidated gross profit margin for the first three quarters of 2019 was 28.

56%, an increase of 1 over the same period last year.

32 units; of which the gross profit margin of the main retail sector was 27.

19%, up by 0 compared with the same period last year.

50 units, the gross profit margin of the real estate sector was 36.

26%, up 5 from the same period last year.

44 units.

Looking at the same store performance by region, the gross profit margins of the retail business in South China, Central China, Southeast China, East China, Beijing and Chengdu were 27.

38% / 26.

32% / 26.

08% / 28.

61% / 28.

66% / 27.

16%, a change of -0 over the same period last year.

32/1.

38/2.

70/2.

95/1.

85/2.

The 07 averages, in terms of absolute value, the gross margin of Beijing ranks first in each region. From the perspective of changes, the growth of gross margin in East China may increase and may surpass Beijing in the future.

Looking at the same store performance according to different industry formats, the company’s department store / supermarket / shopping center / convenience store formats achieved average monthly gross profit margins of 139/394/78/733 yuan per square meter in the first three quarters of this year, which were different from the same period last year.8.

55% / 32.

66% / 2.

63% / 8.

43%.Looking at the same-store performance according to the business model, the company ‘s gross profit under the self-operated / joint-operated / leasing model in the first three quarters of this year has increased by zero each time.

71% /-0.

20% / 20.

56%.

In summary, the increase in the company’s comprehensive gross profit margin was mainly due to the increase in the gross profit margin of the land business, and the increase in the gross profit margin of the retail business in the first three quarters was mainly due to the significant improvement in the same store gross profit margin of the supermarket format.

Comprehensive period expenses of the company 22.

73%, a year-on-year increase of 1.

73 per share, sales / management / financial expense ratios are 20 respectively.

59% / 2.

21% /-0.

07%, an increase of 1 each year in the same period last year.

51/0.

14/0.

08 averages.

The increase in the sales expense ratio and management expense ratio was mainly due to the increase in utilities, cleaning fees, advertising and promotion fees brought by maintaining store operations and opening new stores.

The increase in the related financial expense ratio was mainly due to the decrease in the company’s periodic expenses and the reduction of the time deposit refund required, which resulted in a slight increase in financial expenses, which caused the financial expense ratio to increase slightly.

(3) The store continued to expand steadily, and the experiential industry model was upgraded. In response to the opportunity of customer experience reporting, the company opened a new community living center, a shopping center, an independent supermarket, 23 convenience stores, and closed 11 convenience stores.

As of the end of the third quarter of 2019, the company has a total of 69/84/16/164 department stores / supermarkets / shopping centers / convenience stores nationwide, which has increased by 1/1/1/12 department stores / supermarkets / shopping centers /Convenience stores, and the company temporarily signed 5 shopping mall and department store projects and 5 independent supermarket projects in the report.

In addition, in October, the company newly opened Yingtan Tianhong Shopping Center in Jiangxi Province and signed a new contract for the Suzhou Wuzhong Central City Project.

The department stores of the company’s department continue to experiment with the first-floor block of the store, the editing of other categories of themes, and similar interactive experience projects to enrich the shopping experience of consumers; while the shopping center is committed to creating a series of age groups to enjoy happy hoursA life center that focuses on happy hour and family life.

The company combines a stable store growth strategy with a physical store consumer experience improvement plan to enhance customer stickiness and increase company revenue.

(4) Digital upgrade of stores to improve service efficiency and quality, and supply chain integration to improve customer demand matching The company has always taken store digitization as the store digitization as the most important part of the store renovation and upgrade plan, and regards it as the most effective way to promote revenue growth.

Specifically, when it comes to the supermarket format, the company ‘s online consumption and offline pickup services developed by the company have a joint consumption rate of more than 杭州桑拿网 50%, and the sales of “Tianhong Home” business have increased by more than 46%.

The earliest to the department store format, the company launched the WeChat function of shopping guide companies in major department stores to realize the full online of member management, order management and user marketing, providing an alternative for brand merchants entering the company’s department stores and more direct channels for consumers.

As of the semi-annual report of 2019, the company’s digital membership has reached 18.82 million, accounting for more than half of the total number of members.

In addition, the company also optimized the business docking process with suppliers and logistics service providers through the integration of the national supply chain to improve the efficiency of the supply chain.

In addition, the 苏州夜网论坛 company also uses brand management based on strategic core products to create a high-quality, low-cost, and efficient supply chain to better meet the diverse needs of consumers.

3.
Investment suggestion We believe that the company is unique in the industry in terms of service leadership and quality leadership in various formats of department stores, shopping malls, supermarkets and convenience stores.

The company is oriented to customer needs, deeply digs online services through digital technology, creates high-quality services through format upgrades, provides efficient services through supply chain transformation, and improves the efficiency of product category management.

The company reported that although the ratio of cocoa store performance to previous years has been slightly shortened, the gross profit margin of the retail business has steadily increased, and the existing department store business has gradually changed its neighbourhood. The effect of the overall upgrade and transformation needs to be tested.

In addition, the company’s required consumer industry-type supermarkets, convenience stores and other large-scale performance are improving; the theme blocks of experiential shopping malls and shopping malls match the consumer’s pursuit of experiential and personalized consumption trends.The anti-cyclical ability in the downward period is prominent.

At the same time, considering the steady expansion of the company, the store reserve items in the extension are redundant.

The combined company ‘s orderly expansion of stores and the retail business ‘gross profit margin have continued to increase. We maintain our forecast that the company will achieve revenue of 195 in 2019/2020/2021, respectively.

14/201.

60/208.

6.9 billion, net profit attributable to mother 8.

94/10.

60/12.

19 trillion, corresponding to 0 PS.
67/0.
65/0.

63 times, corresponding PE is 15/12/11 times, maintaining the “recommended level”.

4.The risks indicate the risk of competition and divergence in the consumer market, the risk of renewal of the store due to expire, and the risk of the quality of the store brought by the fast opening of the store.