Hongqi Chain (002697): Growth of main business & Newnet Bank boost performance + 53% endogenous extension & Yonghui empowerment to accelerate development

Hongqi Chain (002697): Growth of main business & Newnet Bank boost performance + 53% endogenous extension & Yonghui empowerment to accelerate development
The company announced that the company’s operating income for the first half of 2019 was 38.29 ppm, a five-year increase of 5.89%; net profit attributable to mother is 2.370,000 yuan, an increase of 52 in ten years.93%.The company achieved operating income in the second quarter of 201919.370,000 yuan, an increase of 9 in ten years.20%; net profit attributable to mothers in the second quarter1.580,000 yuan, an increase of 56 in ten years.84%. Operating income: Store sales growth drives H1 revenue +5.89%.The company’s 2019H1 operating income was 38.29 ppm, a five-year increase of 5.89%, mainly due to store sales growth.In the first half of 2019, the company’s value-added business income was 30.69 trillion, a decrease of 0 compared with the same period last year.15%. Gross profit margin: Store upgrades / supply chain / commodity structure optimization drive gross profit margin increase70pct.The gross profit margin for 2019H1 is 30.22%, an increase of one year.70pct.Benefiting from the company’s store upgrades, supply chain and product structure 杭州桑拿 optimization, the company’s gross profit margin continued to rise. Period expenses: The sales expense ratio increases by 0 every year.66 points.The company’s expenses during the first half of 201924.86%, rising by 0 every year.99 points.① Sales expense ratio: The company’s 2019H1 sales expense ratio is 22.99%, rising by 0 every year.66pct, mainly due to the increase in store-related expenses; ② Management expense ratio: the company’s 2019H1 management expense fee1.78%, an increase of 0 a year.43pct, mainly due to the increase in the company’s media newspapers and magazines advertising expenses and depreciation and amortization expenses; ③ financial expenses rate: the company’s 2019H1 financial expenses 0.09%, a decline of 0 every year.10pct, mainly due to the index generated by time deposits in this period. Net profit: Main business growth and Xinwang Bank boosted performance by +52.93%.The company’s net profit attributable to the parent in 2019H1 is 2.370,000 yuan, an increase of 52 in ten years.93%, mainly due to the growth of the main business and investment income of Xinwang Bank. As a result of investment in Xinwang Banking Corporation, investment income was 70.03 million yuan, an increase of 223 per year.81%.Subverting the impact of Xinwang Bank’s investment income, it is estimated that the company’s main business will achieve net profit attributable to its mother.67 ppm, an increase of 25 per year.43%.The company’s 2019H1 net margin is 6.18%, an increase of one year.91 points. Abundant cash flow lays a solid foundation for endogenous extension.The company has abundant cash flow, and monetary funds reached 10 in the first half of 2019.US $ 8.3 billion, laying a solid foundation for endogenous extension.The company’s net cash flow from operating activities in the first half of 2019 was -0.09 million yuan, mainly due to the increase in payment expenses, the net cash flow from investment activities was 2.49 billion US dollars, mainly due to expired recovery of wealth management products. The company is the leader of convenience stores in Sichuan Province, accelerating new store openings and outsourcing mergers and acquisitions to increase market share, Yonghui empowers the fresh produce supply chain, and Xinwang Bank increases its performance.It is estimated that the net profit for 2019-2021 will be 4 respectively.60/5.59/6.3.1 billion, the current market value corresponds to 20/17 / 15xPE.The company’s main business EPS 0.26 yuan / share, combined with the average PE value of A-share supermarket-related listed companies 30 times, giving the company 30 times the main business PE, corresponding to a target price of 7.80 yuan, maintain BUY rating. Risk warning: industry competition intensifies; new store expansion is not progressing as expected