CBEST(SH:600729) Tianfeng Securities·2025-05-13 10:25Investment Rating - The investment rating for the company is "Buy" with a target price indicating a potential return of over 20% within six months [8][20]. Core Views - The company is experiencing steady growth in its main business, with a focus on multi-format adjustments and benefiting from government subsidies in the electrical appliance sector [6][5]. - The company plans to maintain a high dividend payout ratio of 46% for the year 2024, reflecting its commitment to returning value to shareholders [1][4]. - The company has adjusted its profit forecasts for 2025-2027, expecting net profits to be 13.9 billion, 14.7 billion, and 15.4 billion respectively, with a corresponding PE ratio of 10-9 times [6][7]. Financial Performance - In Q1 2025, the company reported a revenue of 4.3 billion, a year-on-year increase of 12%, and a net profit of 475 million, up 9.2% year-on-year [1]. - For the year 2024, the company anticipates a revenue of 17.1 billion, a slight increase of 0.5% in net profit to 1.3 billion, and an 8.8% increase in net profit excluding non-recurring items [1][7]. - The gross profit margin for 2024 is projected to be 27%, with a net profit margin of 7.7% [1]. Business Segments - The company has diversified its business segments, with electrical appliances benefiting from national subsidies, while the department store and automotive trade segments face challenges [2][3]. - In 2024, the revenue growth rates for different segments were as follows: electrical appliances +12.85%, department stores +0.31%, supermarkets +12.16%, and automotive trade +29.51% [2]. - The company has closed 13 stores and opened 5 new ones in 2024, indicating a strategic adjustment in its retail footprint [3]. Investment Income - Investment income from joint ventures, particularly from the consumer finance sector, has become a significant profit contributor, with total investment income of 711 million in 2024, a 15% increase year-on-year [4][6]. - The company has deposited a total of 2.6 billion in consumer finance, generating interest income of 263 million in 2024 [4]. Growth Strategies - The company is exploring new growth avenues through fresh discount stores and private label brands, with private label sales increasing by 50% year-on-year [6]. - The company is also focusing on enhancing its supply chain and brand partnerships to drive growth in its supermarket and department store segments [6].