DS(SH:600694) Soochow Securities·2025-04-29 01:10Investment Rating - The investment rating for the company is "Buy" (maintained) [3] Core Views - The company is a stable profit generator within the department store sector, with a low PE valuation, PB under 1, and a dividend payout ratio of 50%. Recent adjustments have led to a rapid increase in performance. The new leadership and ongoing reform plans are expected to enhance profit margins, with net profit forecasts for 2025-2027 set at 649 million, 716 million, and 768 million respectively, reflecting year-on-year growth of 10.74%, 10.37%, and 7.17% [3][8] - The company reported a revenue of 6.95 billion in 2024, down 5% year-on-year, while net profit increased by 16% to 586.2 million. The first quarter of 2025 saw a revenue of 1.925 billion, a decrease of 8% year-on-year, with net profit slightly up by 0.7% [8][3] - The company is focusing on optimizing its operational structure, which has led to an increase in profit margins. In Q1 2025, the gross margin and net profit margin were 44.8% and 15.0%, respectively, showing improvements compared to the previous year [8][3] Financial Performance Summary - The total revenue forecast for 2023 is 7.331 billion, with a slight increase of 0.75% year-on-year. However, a decline is expected in the following years, with projections of 6.949 billion in 2024, 5.867 billion in 2025, and further decreases in 2026 and 2027 [3][8] - The company plans to distribute a cash dividend of 10 yuan per 10 shares, resulting in a dividend rate of 54%, which corresponds to a dividend yield of 3.8% based on the closing price on April 25 [8][3] - The company has been closing underperforming stores to optimize its store structure, resulting in a reduction in the number of department and supermarket stores, which has impacted revenue but improved profitability [8][3]