Hongqi Chain(SZ:002697) Guotai Junan Securities·2024-04-02 16:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 7.24 CNY, reflecting a valuation of 17x PE for 2024, which is above the industry average [1][19]. Core Insights - The company focuses on upgrading its core business, leading to significant profit improvements and an increase in store expansion speed. It is actively exploring live streaming business and accelerating the integration of online and offline operations, supported by Sichuan Merchants' investment, which is expected to drive continuous growth [1]. - In 2023, the company achieved a revenue of 10.133 billion CNY, a year-on-year increase of 1.12%, and a net profit attributable to shareholders of 561 million CNY, up 15.53% [1]. - The company completed the upgrade of 279 stores during the reporting period, enhancing consumer shopping experiences and increasing customer loyalty through a convenient shopping model [1]. - Investment income saw a significant increase of 46.89%, primarily due to improvements in financial services provided by Xinwang Bank [1]. Financial Summary - For 2023, the company reported a total revenue of 10.133 billion CNY and a net profit of 561 million CNY, with an EPS of 0.41 CNY. The projected EPS for 2024 is 0.43 CNY, and for 2025, it is expected to be 0.46 CNY [2][21]. - The company has a net asset return (ROE) of 13.7% for 2023, with projections of 12.9% for 2024 and 2025 [21]. - The company’s total assets are reported at 8.192 billion CNY, with total liabilities of 3.458 billion CNY, indicating a healthy balance sheet [21]. Market Data - The stock price has fluctuated between 4.16 CNY and 6.52 CNY over the past 52 weeks, with a current market capitalization of 6.936 billion CNY [2][5]. - The average daily trading volume is approximately 17.53 million shares, with an average daily trading value of 83.79 million CNY [2].