YONGHUI SUPERSTORES(601933) 长江证券·2024-05-20 08:32Investment Rating - The report maintains a "Buy" rating for Yonghui Superstores (601933 SH) [7] Core Views - Yonghui Superstores faced revenue pressure in 2023 with a 12 7% YoY decline to RMB 786 4 billion but achieved a reduction in net loss attributable to shareholders of RMB 1 33 billion compared to the previous year [5] - In Q1 2024 revenue continued to decline by 9 0% YoY to RMB 216 6 billion while net profit attributable to shareholders increased by 4 6% YoY to RMB 740 million [5] - The company closed 45 stores and opened 12 new ones in 2023 resulting in a total of 1 000 stores by year-end [6] - Digital transformation and operational efficiency improvements led to a 1 6 percentage point increase in gross margin to 21 2% in 2023 [6] - The company's online business accounted for over 20% of total revenue in 2023 with home delivery services showing steady growth [7] Financial Performance - 2023 gross profit was RMB 16 7 billion a 5 8% YoY decline due to revenue pressure [6] - Q1 2024 gross margin remained stable at 22 9% with a slight narrowing of the total expense ratio by 0 06 percentage points [6] - The company's EPS is projected to be RMB 0 02 0 05 and 0 08 for 2024 2025 and 2026 respectively with corresponding PE ratios of 130 49 and 31 [7] Operational Strategies - Yonghui Superstores is optimizing its store network by closing underperforming stores and enhancing the efficiency of existing ones through digital tools such as smart product selection and pricing [6] - The company is focusing on improving its product mix and cost structure which has contributed to higher gross margins and reduced losses [7] Industry Context - The retail industry is experiencing intensified competition with new formats like discount stores potentially diverting traffic from traditional supermarkets [6] - Despite these challenges Yonghui Superstores is leveraging its leadership position in the hypermarket sector to drive transformation and efficiency improvements [7]