Hefei Department Store (000417) 国元证券·2024-11-07 09:16Investment Rating - The report assigns an "Accumulate" rating for HeBai Group (000417) [2][4]. Core Views - HeBai Group is a leading retail enterprise in Anhui province with significant regional advantages and a strong brand reputation. The company operates in retail and agricultural product circulation, with over 300 chain outlets and a robust growth in net profit [2][10]. - The retail and agricultural wholesale sectors are expected to grow, supported by new business initiatives and government policies aimed at boosting consumer spending [2][24]. Company Overview - HeBai Group is recognized as the retail leader in Anhui province, with a history dating back to 1959. The company has expanded its operations to include 51 subsidiaries and 9 affiliated companies, with a diverse range of retail formats [10][12]. - As of the first half of 2024, the company operates 24 department stores, 180 direct-operated supermarkets, and 25 appliance stores, among others [2][12]. Financial Analysis - In 2023, HeBai Group achieved a net profit of 264 million yuan, marking a year-on-year increase of 57.53%. The first three quarters of 2024 saw a net profit of 162 million yuan, up 22.40% year-on-year, reaching a seven-year high [2][19]. - The company's revenue for 2023 was 6.688 billion yuan, reflecting a 6.13% increase from the previous year. The projected earnings per share (EPS) for 2024-2026 are 0.39, 0.45, and 0.51 yuan, respectively [3][19]. Industry Analysis - The retail sector is experiencing pressure due to overall weak consumer demand, but government policies aimed at stimulating consumption are expected to support recovery. Recent measures include financial incentives for upgrading consumer goods [24][25]. - The offline retail market is adapting to changes, with convenience stores and supermarkets showing relative growth. The department store sector has potential for improvement due to its low market concentration [2][24]. Business Operations - HeBai Group's strategy focuses on strengthening its core retail and agricultural wholesale businesses while exploring new growth areas such as online sales, cross-border trade, and cold chain logistics [2][19]. - The company has established three major logistics parks for agricultural products and is actively integrating resources for comprehensive management of agricultural operations [2][19].