Suning Tesco (002024) Company Review: FMCG Supply Chain Accelerates Convergence and Focuses on Main Retail Business Development


Suning Tesco (002024) Company Review: FMCG Supply Chain Accelerates Convergence and Focuses on Main Retail Business Development
Event: As of February 3, 2020, the company gradually repurchases 3,470 shares.390,000 shares, accounting for 0 of the company’s total share capital.37% of total payment 3.5.5 billion.According to the company’s performance forecast, the net profit attributable to shareholders of listed companies is expected to reach 110 in 2019.03-112.30,000 yuan, including non-recurring profit and loss of 159.55-161.5.5 billion US dollars, consumption growth rate, short-term performance pressure: the overall growth rate of consumption in 2019 fell, offline electronics stores and Suning Tesco direct-operated stores reduced same-store revenue, the company’s earnings under short-term pressure.In the fourth quarter, the company strengthened the management of expenses and expenditures, stabilized its operating conditions, and significantly improved its operating cash flow.In 2019, it is expected that the net profit attributable to mothers will be 110.03-112.30,000 yuan, an average of 15 years.94% -17.44%; net replacement after excluding non-recurring gains and losses is 47.52-51.5.2 billion.On the whole, offline stores continue to contribute to profits, and online business and Suning Logistics are still making up. The advantages of home appliance retailing are outstanding, and the operation capability of the entire category has been improved.According to the statistics of the China Household Electrical Appliances Research Institute, in the third quarter of 2019, Suning Tesco’s omni-channel home appliance retail market accounted for the replacement number.6%, ranking first in the market.Based on the advantages of home appliance retail, the company has accelerated the development of an omni-channel smart retail network. Offline retail cloud franchise stores have contributed to the sinking of the market. Red children, mothers and babies, department stores, Carrefour, Su Xiansheng, and small stores have improved their multi-format store layout.Social community operation, accelerated growth of monthly active users, at the same time promote the development of open platforms, export e-commerce service capabilities, and promote the promotion of platform monetization rate. Efficient integration of the FMCG supply chain has accelerated the business development of the epidemic.With the opening of electronics stores in stores and optimization of operation and management, Carrefour China’s sales in the fourth quarter shifted from segmentation to growth, turning losses into profits. The supply chain of Carrefour and small stores has continued to open up, and the scale of procurement and operating efficiency have increased. It is expected that Carrefour supply can help the gross profit margin of small stores increase by about 5%; through the Carrefour external warehouse model to create a “one-hour living circle”, and promote the development of home business.The average daily order volume of small stores has achieved rapid growth.Under the influence of this round of epidemic, consumer demand for online fresh and fast-moving consumer products has surged. According to the company ‘s official public account Suning Blue Microphone, the traffic of Suning Tesco ‘s main station continued to increase by 50% during the Spring Festival, the online supermarket business doubled, and its offline stores increased.The community conversion rate is also over 50%.In January, Carrefour sales growth is expected to be close to 20%. In the first quarter of 2020, with the synergy of multi-formats of Carrefour, Carrefour and small stores, the fast-moving consumer goods category is expected to accelerate its development. Investment suggestion: Accelerate the integration of the FMCG supply chain, focus on the development of the main retail business, and maintain a “Buy” rating. Suning’s home appliance retail moat is deep, the efficiency of the fast-moving consumer supply chain is 天津夜网 accelerating, the omni-channel and multi-format retail network is gradually improving, and the overall category operation capability is excellent.The company’s capital operation has been basically completed. In 2020, it will focus on the main retail business, and its operating efficiency is expected to continue to improve.In 19Q4, the company’s operating cash flow has returned to normal and will continue to be optimized in 2020. Online business and logistics will continue to reduce losses, which is expected to usher in a non-profit inflection point. It is expected to achieve operating income of 2,913 in 2019-2021.35 / 3,532.14/4343.5.7 billion, an annual increase of 19% / 21% / 23%; net profit attributable to mothers was 110.12/20.44/35.7.9 billion.The previous period forecasted that the net profit attributable to mothers for the ten years of 2019 would be 194.42 ppm, a 43% decrease from the previous forecast, mainly due to the impact of poor investment income forecasts, and the forecast was lowered based on performance forecasts.At present, Suning Tesco’s PB value is less than 1.0, safety margin is high, it is recommended to pay attention to the estimated repair opportunities brought by the 2020 performance improvement. Risk reminders: (1) Online-offline integration is less than expected, and online business costs have soared; offline store renovation has been hindered, and poor expansion of new store operations has continued to intensify, causing the company’s profit growth; (2) search traffic dividends have diminished, and Tmall flagshipThe flow advantage of the store weakened; new traffic entrances such as Suning’s purchase, retail cloud, and Suning’s small stores did not expand smoothly, and the growth of traffic costs continued to increase; (3) Insufficient risk control capabilities of financial services, a substantial increase in bad debts, continued to drag the Group’s cash flow to deteriorate.