BBK (002251) 2018 Annual Report Comments: Performance Meets Expectations Smart Retail Steady Progress
Core point of view The company has saved offline resource endowment. Together with Tencent, JD.com has implemented smart retail to reduce costs and improve efficiency; acquired Jiarunduo Supermarket and accelerated store opening, and the management structure adjustment has brought efficiency improvements.
Performance was in line with expectations and cash flow was good.
In 2018, the company achieved operating income / attributable net profit of 184.
0 billion / 1.
600 million, ten years +6.
7% / + 3.
5%; deduct non-attributable net profit 1.
200 million, at least -3.
In the fourth quarter of 2018, the company achieved operating income / attributable net profit of 43.
100 million / -0.
800 million, ten years +0.
2%, deducting non-attributable net profit -0.
In 2018, the company achieved net operating cash flow of 14.
3 ‰, +24 a year.
5%, CFO / NI 6.
Comparable store profits are maximizing and the growth rate is good. The rapid display of stores and innovative business erode profits.
In 2018, the company opened 38 new supermarket stores (34/40 new stores in 2016/2017), including 26/12 in Hunan Province / outside of Hunan Province; closed 15 stores (12/10 in 2016/2017 Homes), 5/10 in / out of Hunan Province.
In 2018, the company’s supermarket / department store comparable operating income was half a year-1.
0% / + 0.
5%, profit budget ceiling +6.
0% / + 39.
As of the end of 2018, the company had 341 stores in various formats, including 51/290 department stores / supermarkets.
Scale effect, self-operated sub-leasing promotes comprehensive gross margin +1.
53%, multi-factors boosted the expense ratio during the period by +1.
Scale effect. At the end of 17, three new shopping malls and some department stores’ self-operated sub-leasing increased the gross profit margin of the main business by +0.
37 points to 16.
43%, of which the gross profit margin of supermarket / department store +0 respectively.
26 / + 0.
16pct, the gross profit margin inside / outside Hunan Province is +0 respectively.
50 / + 0.
On January 18, 2017, a large number of 83 stores opened in total, and the labor / promotion costs of the stores are gradually expanding. The management institutions are adjusted and the provincial and district management authorization is increased. The company’s period rate has increased by +1.
48pcts, of which sales / management / R & D / financial expense ratios are +0 respectively.
40 / + 0.
58 / + 0.
02 / + 0.
Working with Tencent Jingdong, smart retail is advancing steadily.
Membership: As of the end of 2018, BBK has 500 digital members.
80,000 of which 63% are new customers and 63% are member sales.
8%; Smart parking at Meixi Xintiandi store is 32.
60,000 license plates and about 100,000 new members.
Purchase, JD.com, more points, Meituan home O + O total orders 57.
480,000 orders, operating income of 30.34 million yuan, better membership code, code scanning, multi-point self-help, WeChat self-help total operating income3.
Supply chain: In 2018, the company newly commissioned Jiangxi cold chain warehouses and Sichuan low temperature warehouses to achieve efficient regional distribution; it complemented Jingdong’s warehousing logistics and commodity supply chain resources.
Looking forward to 2019: return to the main business of the Super League, accelerate the display of stores, and improve efficiency.
In 2019, the company plans to open 100 stores with Hunan, Guangxi, Jiangxi, and Sichuan as the focus; together with Tengjing, it is expected that the company will continue to innovate in three aspects: supply chain integration, flow realization, and technology 杭州夜网论坛 efficiency.
The company acquired Jiarunduo Supermarket, and the adjustment of its management structure is expected to bring efficiency in the supply chain and further improve operating efficiency.
Risk factors: intensified regional competition; rapid expansion of new stores to promote erosion of performance.
Investment suggestion: Consider the time for the newly opened stores to grow, assuming that Jiarunduo will consolidate 11 months in 2019 and contribute about 11 operating income.
5ppm, lowered the company’s 2019/2020 operating income forecast to 204.
900 million / 218.
400 million (was 208.
200 million / 229.
3 ppm), lowering the company’s 2019/2020 attributable net profit forecast to 1.
700 million / 1.
900 million (was 2).
0 billion / 2.
400 million), an increase in operating income / attributable net profit forecast for 2021 is 231.
100 million / 2.
20,000 yuan, the corresponding EPS is 0.
25 yuan (the original 2019/20 forecast was 0.
28 yuan), maintain “Buy” rating.