Core Viewpoint - Company is accelerating the adjustment of its existing commercial retail sector through a dual strategy of "business format renewal + scene upgrade," which is expected to inject new momentum into its operating performance [1] Group 1: Business Format Renewal - The Minsheng Department Store on Jiefang Road is undergoing a transformation towards a "24-hour dual first-floor street block MALL," with a focus on youth-oriented renovations and the introduction of collection stores, boutique retail, and lifestyle formats [1] - The Minsheng Department Store on Luomashi is being transformed into a cultural and entertainment dining street that combines "trendy subculture + Xi'an historical culture," featuring XR cinemas, national trend brands, and intangible cultural heritage experience workshops [1] - The Wanghai International is accelerating its transition to a "boutique department store similar to a shopping center," leveraging the advantages of the Hainan Free Trade Port policy to deepen cooperation with leading brands in Hainan [1] Group 2: Operational Efficiency and Future Prospects - All three projects are enhancing operational efficiency through business format renewal and scene upgrades, while leveraging the resources of the supply and marketing system to further release asset value [1] - It is expected that by 2025, the adjusted existing commercial properties will significantly improve rental income and customer flow conversion efficiency, contributing to the company's performance growth in conjunction with policy dividends and consumption recovery trends [1]

Core Viewpoint - The company reported lower-than-expected performance for 2024 and Q1 2025, with a decline in revenue but an increase in net profit for the full year 2024 [1] Group 1: Financial Performance - In 2024, the company achieved revenue of 6.949 billion, a year-on-year decrease of 5.20%, while net profit attributable to shareholders was 586 million, an increase of 16.05% [1] - In Q4 2024, the company reported revenue of 1.661 billion, a year-on-year increase of 0.34%, and net profit of 55 million, a year-on-year increase of 0.13% [1] - In Q1 2025, the company achieved revenue of 1.925 billion, a year-on-year decrease of 8.04%, and net profit of 265 million, a year-on-year increase of 0.7% [1] Group 2: Business Strategy and Operations - The company is optimizing its multi-format operations, with department stores, supermarkets, and electronics contributing 32.71%, 34.22%, and 21.58% to total revenue, respectively [2] - In 2024, the company plans to introduce over 2,000 new brands in department stores and enhance the shopping experience by increasing the share of experiential formats [2] - The company is focusing on direct sourcing for fresh produce and optimizing logistics to enhance its private label offerings, aiming for a private label sales share of over 20% [2] Group 3: Store Structure and Online Channels - The company operates 63 department stores, 19 supermarkets, and 9 electronics stores, with a net reduction of 5, 8, and 3 stores, respectively [3] - The online channel, based on "Tian Gou Wang," generated a GMV of 148 million, with sales reaching 93.05 million [3] - The new management team aims to revamp 20 key stores and open 12 franchise stores in lower-tier cities to drive growth [3] Group 4: Profitability and Cost Control - The company has improved profitability through better supplier collaboration and an increased sales share of high-margin products, achieving gross margins of 39.61% in 2024 and 44.80% in Q1 2025 [4] - The company has effectively managed operating and marketing expenses, with a period expense ratio of 23.68% in 2024 and 22.0% in Q1 2025, both showing a year-on-year decline [4] - The sales, management, and financial expense ratios have shown mixed results, with some categories experiencing slight increases while others decreased [4] Group 5: Investment Outlook - The company maintains a "buy" rating, supported by its strong regional presence and the new chairman's extensive experience in commercial real estate [5] - The company has adjusted its net profit forecasts for 2025-2026 to 672 million and 759 million, respectively, while introducing a new forecast of 821 million for 2027 [5] - The company is expected to maintain a stable dividend payout, with a dividend rate exceeding 50% for 2023-2024 [5]