Hongqi Chain(SZ:002697) Xinda Securities·2024-07-28 08:30Investment Rating - The report assigns a "Buy" rating for Hongqi Chain (002697.SZ) based on its stable performance and growth potential [1]. Core Views - The company achieved a revenue of 5.186 billion yuan in H1 2024, representing a year-on-year increase of 3.67%. The net profit attributable to the parent company was 267 million yuan, up 3.81% year-on-year, while the net profit excluding non-recurring items was 241 million yuan, a slight increase of 0.21% [1]. - In Q2 2024, revenue maintained steady growth, but profit faced pressure. The company reported revenues of 2.671 billion yuan and 2.515 billion yuan for Q1 and Q2 respectively, with year-on-year growth rates of +4.55% and +2.75% [1]. - The company's main convenience store business saw revenue growth in line with industry trends, achieving a total revenue of 5.791 billion yuan in H1 2024, an increase of 3.62% [1]. - The company completed the upgrade of 202 old stores and opened 16 new stores, bringing the total number of stores to 3,655 as of June 30, 2024 [1]. Financial Summary - The report forecasts revenues for 2024-2026 to be 10.43 billion, 10.68 billion, and 10.89 billion yuan respectively, with year-on-year growth rates of 2.9%, 2.4%, and 2.0% [17]. - The net profit attributable to the parent company is projected to be 599 million, 616 million, and 625 million yuan for the same period, with growth rates of 6.8%, 2.9%, and 1.4% [17]. - The report indicates a stable gross margin of approximately 29.6% for the forecasted years [17]. - The company's earnings per share (EPS) are expected to be 0.44, 0.45, and 0.46 yuan for 2024, 2025, and 2026 respectively, with a price-to-earnings (P/E) ratio of around 10 [17]. Market Position and Strategy - The company has strengthened its collaboration with online platforms, attracting 5.35 million customers to physical stores through online channels, with online sales nearing 500 million yuan in H1 2024 [1]. - The report highlights the company's focus on enhancing resource integration and collaborative development following the approval of business matters by the Sichuan State-owned Assets Supervision and Administration Commission [1].