SBGCL(SH:600827) Guoxin Securities·2024-04-14 16:00Investment Rating - The report maintains a "Buy" rating for the company [8][26]. Core Views - The company achieved a turnaround in its net profit excluding non-recurring items, with a net profit of 194 million yuan in 2023, compared to a loss in the previous year. The overall revenue for 2023 was 30.519 billion yuan, a decrease of 5.47% year-on-year [1][10]. - The company's core business segments, particularly the outlet business, showed strong performance, with revenue growth rates of 41.50% for outlets, 23.70% for shopping centers, and 11.11% for department stores in 2023. The company plans to continue expanding its outlet business as a primary growth strategy [1][15][66]. - The company is actively exploring REITs to revitalize its existing assets, with a recent announcement to apply for public REITs for its wholly-owned Shanghai shopping center [1][61][57]. Summary by Sections Financial Performance - In 2023, the company reported a net profit of 399 million yuan, down 40.79% year-on-year, while the net profit excluding non-recurring items was 194 million yuan, marking a recovery [1][2]. - The gross profit margin improved by 1.61 percentage points year-on-year, benefiting from the rapid recovery of the department store sector post-pandemic [20][10]. Business Segments - Supermarkets contributed approximately 78% of total revenue, while the department store segment contributed 114% of net profit, indicating a strong profitability from this segment despite the overall revenue decline [7][28]. - The outlet business, which is a key focus for future growth, achieved significant revenue growth and is expected to continue expanding [15][66]. Future Outlook - The company has adjusted its profit forecasts for 2024-2025 to 724 million yuan and 833 million yuan, respectively, reflecting a cautious outlook due to ongoing challenges in the supermarket segment [1][2]. - The company aims to leverage its strong location advantages and explore innovative retail formats to attract younger consumers and enhance customer experience [53][66].