20230428-东吴证券-王府井-600859.SH-2023一季报点评_有税业务走出底部_万宁免税项目正式投运_3页_448kb

Summary of East Wu Securities Research Report on Whole Fortune (600859)

Main Report Focus

This report covers the 2023 first-quarter performance of Whole Fortune (600859) and evaluates key developments, including the recovery of its taxable business and the official launch of its Wan Ning Free Trade Zone mall. The analysis maintains an "Hold" rating with a target of "Add" given the improved financial metrics and potential of the new mall.

Key Financial Results

• For the first quarter of 2023, Whole Fortune reported:
  • Revenue of 33.67 billion yuan (approximately 336.7 billion yuan; however, consistent units with the table show 3,367 million yuan, which matches the 2023E forecast in millions for Q1).
  • Net profit attributable to shareholders of approximately 22.4 billion yuan, a decrease of 40% year-over-year.
  • Non-GAAP net profit attributable to shareholders up significantly by 145% YoY.
  • Key metrics: Gross margin reached 42.8% (up substantially year-over-year), operating expenses ratio lowered, leading to strong non-GAAP net margin improvement.

Business Analysis

• The taxable business has recovered from lows, driven by a resumption of resident travel and consumption, as evidenced by increased passenger volume in transportation sectors.
• Q1 revenue growth was strong on a quarter-over-quarter basis (up 44% YoY), indicating robust recovery in the retail sector.
• The Wan Ning Free Trade Zone mall (Bovni International Duty-Free Port) officially opened, contributing early revenue with high profitability during its trial phase.

Investment Recommendation

• The report recommends "Hold" with a minor adjustment to prospects due to the new mall's operations and updated financial projections.
• Revised earnings forecast: For 2023 and 2024, and added 2025 predictions show promising growth in revenue and profits. Revised PE valuation supports a "Hold" rating based on increased market confidence from the off-island duty-free initiatives.

Key Risks

• Potential disruptions from domestic or international health issues impacting travel and consumption.
• Uncertainty in the performance of new mall projects compared to expectations.

For full details, refer to the complete report.