CBEST(SH:600729) Tianfeng Securities·2025-09-10 04:43Investment Rating - The investment rating for Chongqing Department Store is "Buy" with a target price not specified [6]. Core Views - The report highlights that the retail transformation is ongoing, leading to an improvement in profit margins. In H1 2025, the company's net profit attributable to shareholders increased by 8.7% year-on-year, despite a revenue decline of 10% [1]. - The report emphasizes the effectiveness of the retail adjustments, with significant increases in customer traffic and sales in reformed stores. The company is also focusing on enhancing its brand presence and upgrading store experiences [2]. - The report suggests that the company is well-positioned to benefit from government policies aimed at stimulating consumer spending, particularly in the consumer loan sector [3]. Financial Performance Summary - In H1 2025, the company reported revenue of 8 billion yuan, a decrease of 10% year-on-year, while the net profit was 774 million yuan, an increase of 8.7% year-on-year. The gross profit margin improved by 1.78 percentage points [1]. - For Q2 2025, revenue was 3.8 billion yuan, down 8.8% year-on-year, but net profit rose by 7.96% to 299 million yuan [1]. - The breakdown of H1 2025 revenue shows supermarket revenue at 3.5 billion yuan (down 4%), department store revenue at 1.2 billion yuan (down 10%), appliance revenue at 1.6 billion yuan (down 7%), and automotive revenue at 1.7 billion yuan (down 25%) [1]. Operational Adjustments - The company has reformed 27 supermarket stores in H1 2025, resulting in a 15% increase in customer traffic and a 14.7% increase in POS sales [2]. - The department store in Banan saw a 65% increase in sales and a 143% increase in customer traffic after renovations [2]. - The automotive segment is transitioning towards new energy vehicles, with a 59.5% year-on-year increase in sales of electric vehicles [2]. Financial Forecasts - The financial forecasts for 2025 to 2027 indicate a slight adjustment in profit predictions, with expected net profits of 1.38 billion yuan, 1.47 billion yuan, and 1.54 billion yuan respectively [3]. - The report projects a PE ratio of 9 for 2025, maintaining a "Buy" rating based on stable operational performance and ongoing adjustments [3].