INZONE GROUP(SH:600858) EBSCN·2024-11-05 00:42Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The company reported a revenue decrease of 1.22% year-on-year for the first three quarters of 2024, with a significant decline in net profit by 50.25% [1]. - The company is focusing on enhancing its supermarket product offerings and transforming its department store format [1][3]. - The company has a strong competitive advantage in the Shandong region and is continuously optimizing its offline stores while promoting online and offline integration [4]. Summary by Sections Financial Performance - For 1-3Q2024, the company achieved a revenue of 4.45 billion yuan, a decrease of 1.22% year-on-year, and a net profit of 117 million yuan, down 50.25% year-on-year [1]. - In Q3 2024, the company reported a revenue of 1.45 billion yuan, a slight decrease of 0.19% year-on-year, and a net profit of 3 million yuan, down 85.93% year-on-year [1][2]. - The comprehensive gross margin for 1-3Q2024 was 38.97%, up 0.05 percentage points year-on-year, while the gross margin for Q3 2024 was 37.11%, down 2.12 percentage points year-on-year [1][2]. Expense Analysis - The company's expense ratio for 1-3Q2024 was 33.17%, an increase of 0.45 percentage points year-on-year, with specific expense ratios for sales, management, finance, and R&D being 24.98%, 3.24%, 4.72%, and 0.23% respectively [2]. - In Q3 2024, the expense ratio was 35.14%, a decrease of 0.51 percentage points year-on-year [2]. Business Segments - The company opened one new store and closed two, totaling 116 stores by the end of Q3 2024, with plans to open five more in Q4 2024 [3]. - Revenue from shopping centers and large supermarkets grew by 12.78% and 9.74% year-on-year respectively, while the department store segment faced challenges with an 11.51% decline in revenue [3]. - The company is optimizing its supply chain in the supermarket segment and accelerating the introduction of leading brands in the department store segment [3].