Hongqi Chain(SZ:002697)2024-08-02 01:01Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance relative to the market [3][4]. Core Insights - The company reported a 3.67% year-on-year increase in revenue for the first half of 2024, reaching 5.186 billion yuan, while net profit grew by 3.81% to 267 million yuan [3][4]. - In Q2 2024, revenue was 2.75% higher year-on-year at 2.515 billion yuan, but net profit decreased by 10.9% to 103 million yuan due to a 42% drop in investment income from joint ventures [3][4]. - The company is focusing on optimizing its store network and enhancing its online sales channels, with 16 new stores opened and 202 existing stores upgraded in the first half of 2024 [3][4]. - The company aims to create a convenient shopping experience with a "15-minute" lifestyle circle, which includes a dense network of stores to reduce operational costs and enhance customer loyalty [3][4]. - The company is also progressing with a share transfer to a state-owned enterprise, which is expected to provide new growth momentum in the long term [3][4]. Financial Summary - For 2024, the company expects total revenue of 10.502 billion yuan, with a year-on-year growth rate of 3.6% [4]. - The projected net profit for 2024 is 599 million yuan, reflecting a 6.8% increase compared to the previous year [4]. - The company's gross margin is expected to be around 29.4% for 2024, with a return on equity (ROE) of 13.1% [4].