Wangfujing (600859): 2Q19 revenue rises month-on-month, speeds up new stores, and pressure on profits

Wangfujing (600859): 2Q19 revenue rises month-on-month, speeds up new stores, and pressure on profits

The company released its 2019 Interim Report on August 31.

In the first half of 2019, the company realized revenue of 134.

22 ppm, an increase of ten years.

69%; net profit attributable to mother 6.

99 ppm, a decrease of 7 per year.

48%; gross margin decreased by 0 in ten years.

2pct to 21.

04%.

Diluted grain income is 0.

9 yuan, return on net assets 6.

27%, net inflow of operating cash1.

4.9 billion.

Brief comments and investment recommendations.

1.

1H19 revenue increased 杭州夜网论坛 by 1.

At 69%, the growth of Olay’s business has been significant, and its overall gross profit margin has declined slightly.

1H19 company revenue 134.

22 ppm, an increase of ten years.

69%, 1Q / 2Q each increased by 0.

21% / 3.

44%; Ole’s rapid business development led to the company’s revenue increase, the second quarter revenue increased by more than 30% in ten years;

8%, the passenger orders increased slightly, the growth rate, the passenger flow decreased slightly, the decline decreased quarter by quarter; the gross profit margin fell by 0.

2pct to 21.

04%, of which 1Q increased by 0.

02pct, 2Q drops to 0.

47 points.

Specifically, (A) division, the department store / shopping mall is still the company’s main format, 1H19 revenue fell 1.
.

67% to 104.

55ppm, gross profit margin rose by 0.

34 武汉夜网论坛 points to 17.

59%, revenue share decreased by 2.

66 points to 77.

9%; the Ole format has become an important driving force for the company’s growth, with revenue growth of 22.

8% to 21.

48 ppm, gross margin decreased by 0.

38pct to 10.

58%, revenue share increased 10 years.
75pct to 16%.
(B) By region, North China still generates the highest income, with an income of 42.

31 ppm, a decrease of 0 per year.

55%; Northeast China has the fastest income growth due to the impact of the new growth Spring Ole, with an annual increase of 74.

2% to 6.

55 ppm; Northwest revenue growth4.

79%, southwest, central, and southern China exceeded the decline by 2.

35/0.

88/10.

24%, little change in East China.

The gross profit margin in the southwest region was 18%, which was basically flat. The gross profit margin in the northeast and east China regions decreased significantly, increasing by 5 respectively.

45/2.

51pct; the gross profit margin of Northwest China and Central China increased slightly; the gross profit margin of North China and South China declined slightly, but remained above 15%.

(C) In terms of categories, the growth of sports and cosmetics is higher. The growth of Olle Sports has increased by nearly 31%, and that of department store cosmetics has increased by more than 18.

5%.

In terms of different types of business, women’s clothing, makeup, jewelry, men’s clothing and sports products are the top five categories of goods sold in department stores, accounting for 66% of the total sales.

81%.

Among them, makeup, jewelry, and sports categories maintained rapid growth; sports, women’s clothing, men’s clothing, and luggage categories were the top 4 types of products sold by the Olay format, accounting for 85% of total sales. Except for the slight decline in luggage categories, other categories continued to grow.
2.

The store expansion continued to advance, and the national network layout was actively operated.

① Opening: Nanchang Wangfujing Shopping Center opened on June 28, with a total construction area of 230,000 square meters and a leased area of 18.

40,000 square meters with a lease term of 20 years.

② Contract signing: The company is actively planning the northwestern region and plans to establish Xining Wangfujing Xinqian Shopping Center in Xining, Qinghai, with a total leased area of 8.

90,000 square meters with a lease term of 20 years. The company is expected to open in the second half of this year.

③ Preparation: Foshan Wangfujing Shopping Center project is still in the construction stage, and the company expects to complete and deliver in 2020.

3.

1H19 expense ratio increased by 1.

25pct, effective tax rate increased by 3.

54 points.

1H19 expense ratio increased by 1.

25pct to 14%, mainly from the increase in the financial expense ratio; due to the decrease in interest income, the increase in index expenditure caused the financial expense ratio to increase by 1H

2pc, of which interest rate income as a percentage of income decreased by 0.

95pct, interest rate expenditure as a percentage of income increased by 0.

22pct; sales expense ratio decreased by 0.

11 points to 10.

46%, of which the utility rate and rental fee rate have each decreased by 0.

18/0.

16pct; management expense rate increased by 0.

17 points to 3.

65%, of which wages and surcharge rates rose by 0.
35 points.
The effective income rate increases by 3 every year.

54 points to 27.

73%, 1Q / 2Q each increased by 3.

5/3.

51 points.

4.

Profits are falling year by year.

At 6%, net profit attributable to mothers decreased by 7.

5%, excluding recurring effects, and the estimated profit dropped by 8%.

1H19 profit fell 4 year-on-year.

6% to 9.

7.2 billion, of which 1Q / 2Q each fell 7.

71/0.

05%, a significant improvement in the second quarter; net profit attributable to mothers decreased by 7 year-on-year.

5% to 70,000 yuan, of which 1Q / 2Q each decreased by 11.

27/1.

76%; Excluding interest income from large certificates of deposit in 1Q18, the profit and loss of fair value changes in 1H19 Beichen Industrial, we calculated that profit in 1H19 decreased by 8%, and 1Q / 2Q each decreased by 5% / 10%.

Maintain judgment of the company.

The company has a total of 52 stores, covering seven national economic regions, 22 provinces, 32 cities, with a total construction area of 2.83 million square meters. It is a nationally distributed department store with a small number of shares. The governance structure is optimized.Innovate with the direction of Outlets, and develop in-depth joint ventures in commodity operations, self-operated and private brand development.

We believe that the company’s main business platform has solid performance, reasonable store order distribution, and healthy and stable financial conditions.

Update profit forecast.

Net profit is expected to be 11 in 2019-2021.

800 million, 12.

8 ppm, 14 ppm, -2 year to year.

2%, 9%, 9%, EPS 1 each.

51 yuan, 1.

65 yuan, 1.

8 yuan.

Considering that the company, as a national department store, has made progress and effects in the transformation of commodities, customer capacity building and industry innovation, as well as the ability and opportunity to promote industry integration, referring to the scale of peer companies, we give 2019 net profit.12-15 times PE, corresponding to a reasonable value range of 18.

16-22.

7 yuan, given the “preliminary market” rating.

Risk reminders: the incubation period of new stores is prolonged; the risk of competition pressure; the progress and effect of transformation are lower than expected.