RAINBOW(SZ:002419) Changjiang Securities·2024-09-13 01:10Investment Rating - The investment rating for Tianhong Co., Ltd. is "Buy" and is maintained [5][4]. Core Views - The company reported a revenue of 6.12 billion yuan for the first half of 2024, a year-on-year decline of 1.8%, and a net profit attributable to shareholders of 150 million yuan, down 28.3% year-on-year [3][4]. - The shopping center segment performed relatively well, and the optimization of expense allocation led to a significant reduction in operating losses in the second quarter [3][4]. - The company continues to advance its business transformation and digitalization strategies, which are expected to enhance the overall operational quality of existing stores [4][3]. Summary by Sections Financial Performance - For the first half of 2024, the company achieved a revenue of 6.12 billion yuan, with a 1.8% decline year-on-year. In the second quarter alone, revenue was 2.78 billion yuan, down 2.4% year-on-year [3]. - The company closed 4 independent supermarkets in the first half of the year, maintaining the number of shopping centers and department stores at 41 and 59, respectively [3]. - Same-store sales for shopping centers, department stores, and supermarkets changed by +5.4%, -4.5%, and -1.3% respectively, with the decline in supermarket same-store sales primarily due to a 4.2% drop in average transaction value [3]. Profitability - The gross profit margin for the second quarter was 37.1%, a decrease of 1.9 percentage points year-on-year. However, the company managed to reduce total sales, management, R&D, and financial expenses by 120 million yuan in the second quarter [3]. - The operating loss for the second quarter was 7.24 million yuan, a year-on-year improvement of 37.52 million yuan [3]. Strategic Initiatives - The company is actively pursuing business transformation and digitalization, enhancing its operational systems and customer experience management capabilities [3][4]. - The company aims to improve product competitiveness through the establishment of a global procurement network and the development of private labels and ready-to-eat food products [4]. Earnings Forecast - The expected EPS for 2024, 2025, and 2026 are projected to be 0.20 yuan, 0.24 yuan, and 0.27 yuan respectively [4][8].