Texhong (002419) 2018 Annual Report Comments: Steady Improvement in Gross Margin

Rainbow shares release the 2018 annual report.

At the core of the report, the company achieved operating income of 191.

USD 3.8 billion, an annual increase of 3.

25%; realize net profit attributable to shareholders of listed companies.

40,000 yuan, an increase of 25 in ten years.


The company achieved operating income of 53 in 2018Q4.

4.0 billion, down 5 every year.

25%; realize net profit attributable to shareholders of listed companies.

USD 3.1 billion, an annual increase of 2.


The development of store network is comparable to the growth of same store revenue.

In 2018, the company opened eight new department store / shopping mall stores, and it is estimated that eight new independent supermarkets and 48 convenience stores will also be opened.

In addition, 7 stores have renewed their business premises for 5-15 years. The scale of the stores has continued to grow steadily and lay a foundation for the company’s revenue growth.

Judging from the operation of mature department stores / shopping malls that have been open for two years, except for East China, the department store revenue in the Southeast area has declined slightly, and the best performance of stores in other regions, including comparable store revenue in BeijingThe largest increase was 13.


Comparable supermarket formats also saw a 4% increase in revenue.

On the whole, the company has achieved certain results in attracting passenger flow through industrial upgrading.

Gross profit margin hit a new high, three-fee rates rose slightly, and net interest rates increased.

In 2018, the company’s department store stores continued to implement block adjustments, increasing the leased operating area with a higher gross profit margin, and the leased area increased by more than 9%.

74 units.

Taken together, the company’s gross profit index increased by 1 last year.

49 averages, a new high.

In terms of the three expenses, the increase in sales expenses and management expense ratios increased slightly, mainly due to the increase in employee compensation and property lease fees. The financial expense ratio decreased slightly due to the increase in revenue. Overall, the company’s three expenses increased by 0.

67 averages with a net interest rate of 0.

86 average increases.

The company firmly promotes the three major strategies of digitalization, experience, and supply chain.

In terms of digitalization, the company reached a strategic cooperation with Tencent in 合肥夜网 April 18, launched the first smart store in November, and strengthened the digital transformation of the middle and back office.

The online business promoted through the Tianhong APP also performed well, the previous GMV7.

9.6 billion, a year-on-year increase of 32%, the number of members reached 8.4 million, and more than 100 million people a year interactively obtain information or consume on the APP.

In terms of experiential, continue to promote the editorial transformation of department stores and shopping malls to create distinctive neighborhoods and form a differentiated image and positioning.

In terms of supply chain, the company further cultivates strategic core commodities such as direct mining at home and abroad, and private label.

Revenue from international direct mining products increased by 61%, and sales of private-owned brands increased by 102%. In addition, the company also achieved cost savings in warehousing and logistics by optimizing operating procedures and personnel equipment in logistics centers.

By adhering to the promotion of the three major strategies, the company is gradually transforming from a traditional retail company that provides goods to a smart and efficient life consumption service platform.

[Investment suggestion]We believe that the company has completed the core competitiveness of the reorganization through the continuous deepening of the three major strategies. According to the company’s 2019 plan, it is necessary to accelerate the dense deployment of advantageous areas in business expansion, and wait for the new area expansion to startRevenue continued to grow, while the structural adjustment of the department store format and the supply chain construction of the supermarket format increased the gross profit margin. The digital transformation of the front, middle, and back office will improve efficiency and reduce costs.

The company’s 19/20/21 revenue is expected to be 211.


54/247.5.8 billion yuan, net profit attributable to mother 10.



790,000 yuan, EPS 0.



15 yuan, corresponding to PE 13.



78 times, maintaining the “overweight” rating.

[Risk reminder]Retail market competition is intensifying; the drainage effect of format optimization is less than expected; the cultivation of innovative supermarkets and convenience stores is less than expected.