CBEST(600729) Guotai Junan Securities·2024-09-02 13:06Investment Rating - The investment rating for Chongqing Department Store is "Accumulate" with a target price of 25.56 CNY, down from the previous forecast of 29.50 CNY [3][12]. Core Views - The report indicates short-term fluctuations but anticipates improvements in performance. The company is actively pursuing cost reduction and efficiency improvements, focusing on product strength and expanding fresh discount stores, which are expected to stabilize performance [11][12]. Financial Summary - For H1 2023, the company reported revenue of 8.98 billion CNY, a decrease of 11.6% year-on-year, and a net profit attributable to shareholders of 712 million CNY, down 21.1% [12]. - The report forecasts a decline in earnings per share (EPS) for 2024-2026 to 2.84 CNY, 3.07 CNY, and 3.31 CNY respectively, reflecting growth rates of -4.9%, 8.3%, and 7.9% [12][13]. - The company’s gross margin for H1 2023 was 26.7%, with a net profit margin of 7.97% [12]. Operational Insights - The company closed 10 stores and opened 3 new ones, ending H1 with a total of 274 stores [12]. - The performance of the electrical appliances segment was positive, benefiting from upgrades and replacements [12]. - The report highlights the company's efforts in negotiating rent reductions and optimizing supply chains to enhance profitability [12]. Market Performance - The stock has seen a significant decline over the past 12 months, with absolute declines of 45% [8][12]. - The current price of the stock is 17.13 CNY, with a market capitalization of 7.548 billion CNY [3][6]. Valuation Metrics - The report assigns a price-to-earnings (P/E) ratio of 9 times to the company, with a current dividend yield exceeding 7% [12]. - The net asset value per share is reported at 15.60 CNY, with a price-to-book (P/B) ratio of 1.1 [7]. Future Outlook - The company is expected to maintain a good dividend level in 2024, with ongoing efforts to improve operational efficiency and product offerings [12]. - The report emphasizes the potential for recovery in performance as the company continues to adapt to market conditions and consumer preferences [11][12].