Macalline (601828): Steady revenue growth, rising expense ratio, pressure on performance

Macalline (601828): Steady revenue growth, rising expense ratio, pressure on performance
Event: The company released its semi-annual report for 2019 and achieved a total revenue of 77.6 ppm, an increase of 21 in ten years.9%, of which the second quarter achieved revenue of 42.2 ppm, an increase of 21 per year.2%.Realized net profit attributable to mothers27.100 million US dollars, a year-on-year decrease of 11%, mainly due to the decrease in the fair value of investment real estate by 100 million US dollars, the asset 杭州风月网 disposal income by nearly 200 billion US dollars, and the impact of higher expense ratios.In the first half of the year, the company realized net profit after deductions.1 ppm, a six-year increase of 6.1%.The overall performance was solid and basically in line with expectations. Self-operated business: stable growth rate and increased gross profit margin.The company’s self-operated shopping malls achieved revenue of 39 in the first half of the year.5 ppm, an increase of 11 years.8%.During the period, one new self-operated shopping mall was opened, and another three were transferred to self-operation. The total number of self-operated shopping malls reached 84, of which 53 were self-owned property shopping malls, and the total area of self-operated business increased by 62.30,000 flats reached 754.20,000 flats.The overall rental rate is 95%, which remains high.Mature stores have been growing for many years, driven by improvements in ping efficiency.9%, the operating capacity has been steadily improved.In the first half of the year, the gross profit margin of self-owned shopping malls increased further1.6pp to 86.3%, the gross profit margin of leasing malls increased up to 2pp to 45%, driving the overall gross profit margin of self-operated malls to increase by 1.3pp to 79.5%.In addition, the company has 32 self-operated shopping malls under preparation. It will continue to expand its self-operated layout in core cities such as first-bedroom and second-tier. Entrusted business: Channel sinking continued to advance, and entrusted business grew rapidly.In the first half of the year, the company’s committee-managed shopping malls opened 3 new stores, of which 12 were newly opened and 6 closed. Another 3 committees were managed and transferred to self-employment.50,000 flats reached 1242.50,000 square meters, the expansion of stores promoted the rapid growth of the commission management business revenue, and achieved 21 in the first half of the year.6 ppm, an increase of 23 in ten years.In terms of sub-item revenue, due to the decrease in the number of new contracted projects in the first half of the year, the pre-project title consulting fee recognition revenue decreased by 14%, and realized revenue of 5.400 million US dollars, but due to the increase in the overall number of committees, the annual naming consultation fee has reached 10.1 ppm, an increase of 21 in ten years.9%, and the commission for business consulting and investment is 5.500 million (+284.2%), and engineering consulting income was nearly 61.32 million yuan (-57.6%).The overall occupancy rate of the commissioned shopping malls was also 95%, which also remained high.The overall gross profit margin of the commissioned business is 65.5%, up from 4 previously.9pp.In addition, the company currently has 353 commission-managed commissioned projects that have not yet been opened, and under the general trend of consumption upgrade in offline cities, commission-managed malls still have room for expansion. The increase in the proportion of low gross profit margin business led to an increase in total gross profit margin, increased expenses and improved cash flow.In the first half of the year, the company achieved a gross profit margin of 67%, a year-on-year decrease of 2%.3pp, first of all due to the commission management, and the rise in the proportion of construction and design business. The gross profit margin of these more businesses is significantly lower than its own business, which is a normal business diversification development.Due to the expansion of the operation scale and the overall weak period of the industry, the company’s expenses increased, and the sales expense ratio in the first half of the year was 12% (+1).9pp), management and R & D expense ratio 9.3% (+0.8pp), the financial expense ratio has increased by 3 due to the company’s interest-based denial.5pp to 12.7%.The decrease in the fair value of supplementary investment real estate and the decrease in asset disposal income have led to a decrease in the company’s overall return to its parent’s net interest rate in the first half of the year.5pp is 36.9%.In terms of cash flow, the company’s net operating cash flow for the first half of the year was 11.8 megabytes, picking up slightly a year. Cooperation with Tencent Ali continued to advance, and Internet attributes continued to improve.In October 2018, the company and Tencent reached a strategic cooperation to promote the smart marketing IMP system. The company gradually upgraded it to a global super-flow field that radiates online and offline. Until now, IMP has been deployed in 315 stores in 200 cities across the countryonline.In May 19, Ali fully subscribed for 43 issued by Hongxing Holdings, the controlling shareholder of the company.6 billion exchangeable bonds, and reached a strategic cooperation agreement with the company, and plans to carry out all-round cooperation with the company in the construction of new retail stores, e-commerce platform construction, logistics warehouse distribution and installation of service provider systems, and consumer finance.Eventually, the company has launched Tmall’s “Same City Station”.As the company deepens its cooperation with Tencent and Ali, the increase in traffic will further drive the company’s same-store sales. Earnings forecasts and investment advice.The EPS for 2019-2021 is expected to be 1.39 yuan, 1.53 yuan, 1.68 yuan, corresponding to PE is 8 times, 7 times and 6 times, maintaining the “buy” level. Risk warning: the decline in demand for home decoration and furniture, intensifying competition in the industry; the fair value of real estate may gradually decline; the number of newly opened stores may be less than expected, and the profitability of self-operated and commissioned models may decline.