红旗连锁：国资入主，强强联合，夯实长期发展

Investment Rating - The investment rating for the company is "Outperform the Market" [1] Core Views - The company has completed the transfer of shares to a state-owned enterprise, which strengthens its long-term development prospects. The new controlling shareholder is the Sichuan State-owned Assets Supervision and Administration Commission [4][9] - The company has a robust cash flow, with a free cash flow of 400 million in 2023 and cash on hand of 1.8 billion as of September 30, 2024, supporting future dividends [4][9] - The company is a leading convenience supermarket in Sichuan, with a history of expansion and efficiency improvements, currently operating 3,655 stores [4][10] Financial Performance - The company's revenue for 2023 was 10,133 million, with a slight year-on-year growth of 1.1%. The projected revenue for 2024 is 10,205 million, reflecting a 0.7% increase [7][27] - The net profit for 2023 was 561 million, with a year-on-year increase of 15.5%. The forecasted net profit for 2024 is 519 million, indicating a decrease of 7.6% [7][27] - The gross profit margin has remained stable around 29.6% in recent years, with a projected margin of 29.4% for 2024 [7][27] Market Position and Strategy - The company maintains a strong market position in Chengdu, with over 90% of its revenue generated from this region. The gross margin in the main urban areas is the highest, ranging from 24% to 26% [5][11] - The company has focused on supply chain enhancements and digital transformation since 2016, leading to a steady increase in its net profit margin to around 4% [5][11] - The company has a history of strategic acquisitions and store openings, with significant expansions occurring from 2015 to 2016, followed by a focus on store optimization and management improvements [16][22] Valuation and Forecast - The projected net profit for the company from 2024 to 2026 is expected to be 5.19 billion, 5.53 billion, and 6.01 billion respectively, with year-on-year changes of -7.6%, 6.6%, and 8.7% [6][22] - The estimated market value range for the company is between 8 billion and 9.3 billion, with a corresponding reasonable value per share between 5.90 and 6.87 yuan [6][22]