Hongqi Chain(002697) GOLDEN SUN SECURITIES·2024-11-01 02:51Investment Rating - The report maintains a "Buy" rating for the company [3] Core Views - The company reported a revenue of 7.767 billion yuan for the first three quarters of 2024, a year-on-year increase of 1.65%, while the net profit attributable to shareholders was 390 million yuan, a decrease of 4.21% year-on-year [1] - The company is adjusting its store layout and continuously optimizing its product and supply chain [1] - The company plans to transfer its 20% stake in Gansu Hongqi to a state-owned enterprise for a nominal price of 1 yuan, after which it will no longer hold any equity in Gansu Hongqi [1] - The company is focusing on self-operated product development and enhancing logistics and supply chain efficiency through data analytics [1] Financial Performance Summary - For Q3 2024, the company achieved a revenue of 2.581 billion yuan, a year-on-year decrease of 2.17%, and a net profit of 123 million yuan, down 17.91% year-on-year [1] - The gross margin for Q3 2024 was 29.43%, showing a slight increase of 0.03 percentage points year-on-year [1] - The overall expense ratio increased by 0.56 percentage points year-on-year to 24.98% [1] - The company expects revenues for 2024-2026 to be 10.335 billion, 10.645 billion, and 10.965 billion yuan respectively, with net profits of 544 million, 554 million, and 577 million yuan respectively [1][2] Investment Outlook - The company is positioned as a leading convenience store operator in China with growth potential in store expansion, daily sales, and gross margin [1] - The current stock price corresponds to a P/E ratio of 12.5x for 2024, 12.3x for 2025, and 11.8x for 2026 [1][2]