Hongqi Chain(SZ:002697) Haitong Securities·2024-07-26 08:01Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1] Core Views - The company reported a revenue of 5.186 billion yuan for the first half of 2024, representing a year-on-year growth of 3.67%. The net profit attributable to the parent company was 267 million yuan, up 3.81% year-on-year [3][19] - The company is focusing on optimizing store operations, including adjusting product structures and upgrading store designs. In the first half of 2024, 202 stores were upgraded, and 16 new stores were opened, bringing the total to 3,655 stores as of June 30, 2024 [9][20] - The company is undergoing a significant ownership transfer process, with approval from the provincial state-owned assets supervision and administration commission received as of June 17, 2024 [35] Financial Summary - In the first half of 2024, the company achieved a diluted EPS of 0.20 yuan and a weighted average return on equity of 6.32%. The operating cash flow net amount was 435 million yuan, a decrease of 19.79% year-on-year [3] - The company’s revenue is projected to grow to 10.501 billion yuan in 2024, with a net profit of 578 million yuan, reflecting a year-on-year increase of 3.1% [10][36] - The estimated reasonable market value range for the company is between 7.2 billion and 8.4 billion yuan, corresponding to a reasonable price range of 5.26 to 6.20 yuan per share [11][21]