Hongqi Chain(002697) Guotai Junan Securities·2024-11-06 01:55Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company is focusing on its core business, optimizing product structure, and adjusting store layouts, which is expected to drive further development [2] - The company has raised its EPS forecasts for 2024, 2025, and 2026 to 0.44, 0.47, and 0.51 yuan respectively, up from previous estimates of 0.43, 0.46, and 0.50 yuan [3] - Due to short-term pressures from store adjustments and upgrades, the target price has been lowered to 6.80 yuan from 7.08 yuan, reflecting a valuation slightly below the industry average of 15.7x PE for 2024 [3] Financial Summary - For the first three quarters of 2024, the company achieved revenue of 7.767 billion yuan, a year-on-year increase of 1.65%, and a net profit attributable to shareholders of 390 million yuan, a decrease of 4.21% [3] - In Q3 2024, revenue was 2.581 billion yuan, down 2.17%, and net profit attributable to shareholders was 123 million yuan, down 17.91% [3] - The company’s main business net profit for 2024 was 304 million yuan, representing a year-on-year growth of 1.21% [3] - The company’s total revenue projections for 2024, 2025, and 2026 are 10.568 billion yuan, 11.097 billion yuan, and 11.685 billion yuan respectively, with expected growth rates of 4.3%, 5.0%, and 5.3% [4] Strategic Developments - The company is actively adjusting its store layout based on urban planning and is focusing on optimizing its product structure and developing more proprietary products [3] - The entry of Sichuan Commerce Investment as a major shareholder is expected to enhance synergies in supply chain and product development [3] - The company is also working on integrating online and offline operations while divesting from non-performing assets, such as transferring a 20% stake in Gansu Hongqi to state-owned Limin for a symbolic price of 1 yuan [3]