Rainbow Group (002419): Accelerated Development of Foreign Port Market, New Stores Will Usher in Performance Release Cycle

Rainbow Group (002419): Accelerated Development of Foreign Port Market, New Stores Will Usher in Performance Release Cycle

Management output verified that the operation level was excellent, and the extension of the extension accelerated the company’s annual report release, and achieved revenue of 191 in 2018.

40,000 yuan, an increase of 3 in ten years.

25%; net profit attributable to mother 9.

40,000 yuan, an increase of 25 in ten years.

92%.

Affected by the real estate business and the impact of warm winter, the company’s 4Q18 revenue decreased by 5.

23%, of which the revenue from the main retail business is flat, and the real estate business is at least about 55% per year.

At the end of 2018, the company had a total of 321 stores, of which 68/13/81/159 department stores / shopping centers / supermarkets / convenience stores, respectively. As a result, 8 new department stores / shopping centers were newly opened (7 located in outlying areas, and the expansion was accelerated)8 independent supermarkets and 48 convenience stores.

At the same time, same-store growth over the past ten years1.

55%, of which same-store growth of department stores / malls / supermarkets / convenience stores were 0.

03% / 5.

55% / 4.

02% /-2.

72%.

In terms of different regions, South China and Central China are still the company’s main revenue sources, accounting for 64% and 12% of revenue respectively, and same-store growth of 2 respectively.

7% and 1.

6%, base camp South China performed well.

The gross profit margin increased steadily, and the net profit margin increased by 0.

86pp to 4.

The main gross profit margin of 7% in 2018 was 27.

25%, an increase of one year.

49pp.

In terms of different regions, the gross profit margin of South China and Central China is 27.

37% and 25.

04%, which is increased by 0 each year.

6pp and 1.

6pp, the new expansion area still optimizes space.

2018 sales management expenses expense 21.

25%, a year increase of 0.

76pp; The company improved employee shareholdings to provide incentives to increase human effectiveness to resist growth in labor costs.

Profit forecast and investment advice The company focuses on digital, experiential, and tight supply chain to consolidate terminal operations and supply chain capabilities, continuously optimize customer acquisition capabilities and user length of time in the store, steadily grow the same store, accelerate the expansion of outreach, and conduct transaction management output.On the basis of full employee motivation and Tencent digital empowerment, we will further improve operational efficiency.

Among the company’s existing stores since 2016, the newly opened stores accounted for about 25%, and the new stores will usher in a cycle of performance release. It is estimated that the net profit attributable to mothers will be 10 in 19-21.

5 billion, 11.

800 million, 1.4 billion, three-year compound growth rate of 16%, taking into account the company’s industry leader level and the capacity of external expansion, given 19 times 18 times PE, the corresponding reasonable value is 15.

5 yuan, maintain “Buy” 杭州夜网论坛 rating.

Risk warning: industry competition continues to intensify, and consumer recovery is not up to expectations; new business models are incubating, and strategic cooperation with Tencent is gradually expected; the number and quality of regional expansion stores exceed expectations.