Suning Tesco (002024) Company Review: Adjustment of Online Business Ideas Expected to Improve Performance in Second Half

Suning Tesco (002024) Company Review: Adjustment of Online Business Ideas Expected to Improve Performance in Second Half

Suning Tesco (002024) Company Review: Adjustment of Online Business Ideas Expected to Improve Performance in Second Half
Event: The company achieved operating income of 1,355 in 2019H1.71 ppm, +22 a year.49%, net profit attributable to the parent company is 21.39 trillion, a reduction of 64 a year.37%.In 2019H1, the company achieved a sales volume of 1,842.15 ppm, an increase of 21 per year.80%; GMV of the online platform is 1,121. 50 ppm, an increase of 26 in ten years.98%. With a complete omni-channel retail network, the focus of fast-moving consumer goods development has shifted to offline. Offline: Improve multi-format, multi-level market smart retail network layout.The company continues to optimize the offline store layout of “two big, two small, and multiple specialists”, and build a smart retail channel network covering different market levels and different consumer needs.As of June 30, the number of home appliance 3C home life specialty stores / red children’s mother and baby stores / Su Xiansheng were 2,110 / 172/9 respectively; Suning Tesco’s direct-operated stores gradually transformed into asset-light retail cloud franchise stores, ending the quarter endThe number of retail cloud self-operated stores is 1,746, and the number of retail cloud franchise stores reaches 3,362, accelerating penetration of low-level markets at the county and township levels. The operating model of Suning’s small stores has continued to be optimized. The second quarter will complete the table.The number has reached 5,368, and Dia’s franchise stores have been reduced to 42.The 37 Wanda Department Stores acquired in the first quarter are operating steadily, relying on offline Suning Plaza to further enrich the omni-channel retail scene. The overall growth rate of the retail industry. The growth of consumer durables such as home appliances is under pressure, and the same stores of electrical appliances still maintain negative growth. Fresh food, FMCG and household products have maintained relatively rapid growth. Offline revenue in the second quarter increased by 2% compared with the same period last year.It will accelerate the integration of offline resources such as small stores / retail clouds / Carrefour, and promote the coordinated development of non-home appliance categories.2019H1 Home Appliances 3C Home Life Specialty Store / Suning Tesco Direct Sales Stores’ Comparable Store Sales Revenue Declined 5 Year-on-year.66% / 6.27%; the operation of maternity and baby stores for red children has gradually matured, with comparable store sales increasing by 16%.84%. Online: Focus on social operations, strengthen Suning’s push-to-buy, Suning push, Su Xiaotuan and other product matrices.2019H1 online self-operated GMV is 1,121.50 ppm, an increase of 26 in ten years.98%, 2019 Q1 / Q2 self-operated growth rate is 41% / 14%, the growth rate of the master station is lower than expected.In the first half of the year, the open platform achieved 324.55 million USD GMV, an increase of 30 per year.50%, 2019Q1 / Q2 annual growth of 26% / 35%, under the strengthening of Suning Pinyin, Suning push off, Su Xiaotuan and other social product operation matrix to strengthen the growth rate.As of June 30, Suning’s retail system registered 4 members.4.2 billion people, online will continue to focus on social operations and improve the efficiency of traffic aggregation / conversion. The revenue growth rate is comparable to the industry, and the gross profit margin has been extended.Online retail sales of physical goods in the first half of 2019 increased by 21.At 6%, the growth rate of the e-commerce industry is generally accelerating. With the company’s all-scenario retail support, the operating income in 2019H1 will reach 1,355.71 ppm, an increase of 22 in ten years.49%.Due to the increase in new product promotion spending and the increase in the proportion of government and enterprise customers’ sales, the gross profit margin fell by zero.38%. The cost rate increases by 2 every year.8%, net profit is reduced by 64 every year.37%.Due to store development, IT capacity building, new category operations and other talent reserves increase, and affected by the amortization of management expense accrual of the third phase of the employee shareholding plan, the staff expense rate increased in the first half; meanwhile, due to the decrease in same-store revenue, the rental rate was the highestIncrease, the sales expense ratio increases by 2% every year.In the reporting year, the company accrued interest on corporate debts issued in 2018, and the financial expense ratio increased by 0.8%.2019H1 realized net profit attributable to mother 21.39 trillion, a reduction of 64 a year.37%, initially 南京夜网论坛 achieved 56 for the sale of Ali shares in the same period last year. The impact of 01 million net profit; if it replaces the investment income of the small store in the second quarter, the net profit attributed to the mother is 7.61 ppm, the initial Wanda business investment income totaled 8.71 trillion, the operating profit of Suning was estimated to be -1 in 19H1.10,000 yuan, operating profit for the same period last year was 4.20,000 yuan. By business sector: (1) Mainland retail segment: 19H1 revenue increased by 22 in ten years.7%, the small shop business completed the table, the net profit increased to 21.36 ppm, net profit attributable to mother increased to 1.7%; (2) Financial segment: Focusing on core business development, Suning’s consumer finance / supply chain financial investment quota will increase by 100% + / 41 in 2019H1.3%, the number of payment user transactions increased by 31% each year, the total assets of Suning Bank increased by 68 compared with the beginning of the year.20%.Revenue from the financial segment reached 21 in the first half of the year.6.6 billion, an annual increase of 68%, achieving net profit4.53 ‰, an increase of 606% in ten years, and the net interest rate rose to 18.4%; (3) Logistics segment: The infrastructure has been continuously improved, and Suning Logistics and Tiantian Express will have a total storage area of 10.9 million square meters in the second quarter. 46 fresh cold chain warehouses will cover 218 cities, supporting the company.Rapid development of fresh food business.19H1 achieved operating income of 66.49 ppm, an increase of 38 in ten years. 6%, compared with 63 in 2018.8% previous growth forecast in real terms; net profit reached 3 in the first half.$ 1.7 billion, with expected growth to expand to 4.8%, Q2 has begun to reduce losses. Investment suggestion: Online self-operated growth indicator, growth of open platform is accelerating, and small shops have shown their tables. It is expected to usher in performance improvement in the second half of the year, maintaining a “Buy” rating. According to data released by the China Household Electrical Appliances Research Institute, Suning’s omni-channel home appliance retail market share in 2019H1 is 22.4%, an increase of 1 per year.3%, continue to lead Jingdong (14.1%).Suning’s omni-channel home appliance retail layout is perfect. Under the advantages of the channel, it optimizes profitability with its own brand, and the certainty of home appliance hematopoiesis is high. The social operation product matrix is formed, and the growth of online open platforms accelerates.The consolidation was completed in the fourth quarter, and fast-moving consumer goods replacements are expected to narrow under the synergy of business integration.Through capitalization, the asset values of Suning Logistics and its own properties will gradually become clear. It is expected that logistics will continue to reduce losses in the second half of the year.If the fundamentals continue to improve, Suning is expected to usher in improved performance in the second half of the year, and subsequent market value growth will be transmitted.It is expected to achieve operating income of 2,997 in 2019-2021.35 / 3,868.02/4480.4.1 billion, realized net profit attributable to mother 164.26/35.32/44.6.5 billion. Risk reminders: (1) Online-offline integration is less than expected, and online business costs have soared; offline store renovation has been hindered, and poor expansion of new store operations has continued to intensify, causing the company’s profit growth; (2) search traffic dividends have diminished, and Tmall flagshipThe flow advantage of the store weakened; new traffic entrances such as Suning’s purchase, retail cloud, and Suning’s small stores did not expand smoothly, and the growth of traffic costs continued to increase; (3) Insufficient risk control capabilities of financial services, a substantial increase in bad debts, continued to drag the Group’s cash flow to deteriorate.