20150817-大和证券-Buy_ahead_of_multiple_catalysts_16页_449kb

报告摘要

Intime Retail Group (1833 HK) Summary

Core Content

Intime Retail Group is a leading department store chain operator in Zhejiang Province, focusing on the medium- to high-end retail market. The company has been actively pursuing an O2O (Online-to-Offline) strategy in collaboration with Alibaba Group since 2014, aiming to enhance store traffic and reduce operating costs.

Main Points

Rating Upgrade: The stock rating has been upgraded from Hold to Buy, with a new target price of HKD10, reflecting the company's improved operations and potential for growth.
Catalysts: Key catalysts include the potential securitisation of store properties, which could unlock over CNY6bn in cash, and the possibility of Alibaba increasing its stake in Intime through the conversion of its convertible bonds (CBs).
O2O Initiatives: Intime has launched several O2O initiatives, including the Miaojie and Miaoke apps, Choice (a cross-border O2O supermarket), and Haitao (cross-border e-commerce), all of which are expected to boost sales and improve customer engagement.
Cost Reduction: O2O initiatives have been relatively low-cost, contributing to improved cost control and margin expansion.
Asset Value: Intime owns 19 of its 46 stores, with the properties estimated to be worth CNY16.6bn. The company is targeting to unlock 60% of this value through asset securitisation.
Financial Improvements: Earnings per share (EPS) forecasts for 2015–2017 have been revised upward, with a significant increase in net profit growth.
Strategic Shift: Intime is shifting toward an asset-light model, which could enhance its financial flexibility and support future dividend increases or share buybacks.

Key Information

Target Price: HKD10 (up from HKD5.10)
Upside: 21.5%
14 Aug 2015 Price: HKD8.23
Major Shareholder: Mr. Guojun Shen & family (22.0%)
Store Properties: 19 out of 46 stores are self-owned
Property Valuation: Estimated at CNY16.6bn
Asset Securitisation Target: Unlock over CNY6bn in cash
O2O Initiatives: Miaojie, Miaohuo, Choice, Haitao, and Miaoke
Expected EPS Growth: 6–38% for 2015–2017
Alibaba's Involvement: Alibaba holds a 20% stake in a joint venture with Intime, and there is potential for it to increase its ownership through CB conversion

Financial Highlights

Revenue and Profit Forecasts (CNYm)

Year to 31 Dec	2015E	2016E	2017E
Revenue	5,729	6,392	6,822
Net Profit	1,007	1,116	1,179
Core EPS (FD)	0.431	0.478	0.505

Profitability Metrics

Metric	2015E	2016E	2017E
Gross Profit Margin	68.9%	68.9%	68.4%
EBITDA Margin	25.7%	28.3%	29.2%
Operating Profit Margin	17.5%	20.0%	20.5%
Net Profit Margin	17.6%	17.5%	17.3%
ROE (%)	9.2%	9.5%	9.4%

Valuation Metrics

Metric	2015E	2016E	2017E
PER (x)	15.7	14.2	13.4
PBR (x)	1.3	1.2	1.1
EV/EBITDA (x)	13.0	10.4	9.6
Net Debt to Equity	32.6%	28.3%	28.0%

Recommendations

Buy Ahead: The analysts recommend buying the stock ahead of potential announcements related to further O2O collaboration with Alibaba and corporate restructuring.
Strategic Focus: Intime is focusing on reducing costs, improving store traffic, and expanding its O2O initiatives to drive long-term growth.
Potential for Expansion: The company is targeting to expand its O2O initiatives and potentially increase its stake in the Alibaba joint venture.

O2O Initiatives Overview

Miaojie: A location-based mobile app with indoor positioning for real-time coupons and marketing.
Miaohuo: An online platform for purchasing in-store products at the same prices.
Choice: A cross-border O2O supermarket with high foot traffic and a 20% gross profit margin.
Haitao: A cross-border e-commerce platform offering discounts on imported goods.
Miaoke: A mobile app for store traffic improvement and customer data collection.
Intime Partnership: An in-house employee incubator for innovation and new business ventures.

Strategic Implications

Alibaba Integration: The appointment of Zhang Yong as chairman signals a stronger integration with Alibaba, potentially leading to more synergies and strategic moves.
Future Opportunities: The company aims to expand its O2O initiatives beyond its current operations and may increase its stake in the joint venture with Alibaba.
Operational Efficiency: The focus on cost control and asset-light operations is expected to improve profitability and financial flexibility.

Conclusion

Intime Retail Group is leveraging its partnership with Alibaba to drive O2O initiatives, reduce costs, and improve store traffic. With a revised target price and a focus on asset securitisation, the company is positioned to unlock hidden value and enhance its financial performance. The analysts are optimistic about the company's future growth and recommend buying ahead of potential catalysts.

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