CBEST(600729) Minsheng Securities·2024-11-01 02:10Investment Rating - The report maintains a "Recommended" rating for Chongqing Department Store (600729.SH) with a current price of 22.06 CNY [4]. Core Views - The company's performance continues to be under pressure, with a revenue decline of 12.0% year-on-year for the first three quarters of 2024, totaling 13 billion CNY, and a net profit of 9.2 billion CNY, down 19.2% year-on-year [2]. - The retail environment remains challenging, particularly in the department store and automotive trade sectors, which experienced significant sales declines [2]. - The company is undergoing operational transformations with the opening of new fresh discount stores, which are expected to contribute positively to future performance [2]. - The forecast for net profit for 2024-2026 is 12.00 CNY, 12.61 CNY, and 13.28 CNY respectively, with corresponding year-on-year changes of -8.8%, +5.2%, and +5.3% [2]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company reported a revenue of 130.0 billion CNY, a net profit of 9.2 billion CNY, and an operating cash flow of 15.2 billion CNY, reflecting a year-on-year decline in revenue and net profit [2]. - The gross margin for the first three quarters was 25.94%, with a slight increase compared to the previous year, while the gross margin for Q3 was 24.36%, showing a year-on-year decrease [2]. - The company’s sales and management expense ratios for Q3 were 15.24% and 5.02%, respectively, indicating an increase in operational costs [2]. Business Segments - The sales performance across different business segments showed significant declines, particularly in the department store and automotive sectors, with Q3 sales down 15.6% and 33.6% year-on-year, respectively [2]. - The company has opened five new fresh discount stores, which have shown promising sales growth, indicating a shift towards new retail formats [2]. Future Outlook - The report anticipates that the company's performance will improve as operational efficiencies are enhanced post-reform and as new retail formats gain traction [2]. - The projected earnings per share for the next three years are 2.72 CNY, 2.86 CNY, and 3.01 CNY, with a price-to-earnings ratio of 8 for 2024 [5][6].