CBEST(600729) Minsheng Securities·2024-07-11 01:30Investment Rating - The report maintains a "Recommended" rating for Chongqing Department Store (600729.SH) with a target price of 19.48 CNY [14][15]. Core Viewpoints - The company experienced a decline in revenue and net profit in the first half of 2024, with revenue at 8.98 billion CNY, down 11.56% year-on-year, and net profit at 712 million CNY, down 21.06% year-on-year [1]. - The company is undergoing operational transformation with the launch of new "fresh + discount" supermarket formats, which have shown promising initial sales performance [4]. - The company is expected to see a recovery in profits as it continues to enhance operational efficiency and adapt to market changes, with projected net profits of 1.446 billion CNY, 1.598 billion CNY, and 1.764 billion CNY for 2024, 2025, and 2026 respectively, reflecting growth rates of 9.9%, 10.5%, and 10.4% [14]. Financial Performance Summary - In the first half of 2024, the company reported a revenue of 8.98 billion CNY, with a significant drop in net profit to 712 million CNY, influenced by high base effects from the previous year and non-recurring losses [1][24]. - The company’s revenue is projected to grow from 18.985 billion CNY in 2023 to 21.987 billion CNY by 2026, with a compound annual growth rate of approximately 5% [5]. - The net profit is expected to increase from 1.315 billion CNY in 2023 to 1.764 billion CNY in 2026, indicating a strong recovery trajectory [5][14]. Operational Developments - The company completed a board restructuring in May 2024, which is anticipated to enhance management confidence and operational efficiency [2]. - The launch of the first "fresh + discount" supermarket format has been successful, achieving sales of over 2.188 million CNY within the first six days of operation [4]. Valuation Metrics - The report indicates a low valuation with a projected PE ratio of 6 for 2024, decreasing to 5 by 2026, alongside a PB ratio of 0.7 in 2024 [5][14]. - The company has maintained a high dividend payout ratio, with historical rates of 142.73% to 153.23% from 2020 to 2023, suggesting a commitment to returning value to shareholders [14].