Hongqi Chain(SZ:002697) INDUSTRIAL SECURITIES·2024-05-22 04:32Investment Rating - The report maintains an "Add" rating for the company Hongqi Lianchuan (002697) [1] Core Views - The company reported steady growth in performance, with 2023 revenue reaching 10.133 billion yuan, a year-on-year increase of 1.12%, and a net profit attributable to shareholders of 561 million yuan, up 15.53% year-on-year [2][10] - The first quarter of 2024 saw revenue of 2.671 billion yuan, a 4.55% increase year-on-year, and a net profit of 163 million yuan, reflecting a 15.95% year-on-year growth [2] - The company is focusing on enhancing consumer shopping experiences and advancing the integration of online and offline operations, with 144 new stores opened and 279 stores upgraded in 2023, totaling 3,639 stores by year-end [23][21] Financial Performance Summary - In 2023, the company achieved a total revenue of 11.3 billion yuan, with a 0.97% increase in main business revenue and a 46.89% increase in investment income [3][10] - The gross profit margin for 2023 was 29.63%, with a net profit margin of 5.54%, both showing improvements year-on-year [15][11] - The company’s operating expenses ratio was 24.80% in 2023, indicating effective cost control [15] Future Outlook - The company has adjusted its revenue forecasts for 2024-2026 to 10.634 billion, 11.035 billion, and 11.437 billion yuan respectively, with net profit forecasts of 591 million, 621 million, and 651 million yuan [17][11] - The expected earnings per share (EPS) for 2024-2026 are projected at 0.43, 0.46, and 0.48 yuan, with corresponding price-to-earnings (PE) ratios of 12.2, 11.6, and 11.0 [17][11] Strategic Developments - The entry of Sichuan state-owned assets is expected to enhance resource integration and support long-term sustainable growth for the company [5][4] - The company is actively exploring live-streaming business models to complement its offline stores, aiming to attract more consumers and drive sales growth [23][21]