Suning Tesco (002024): Financial Services Out of the Table Drives Performance Growth and Waits for Improved Margin in Dual Line Model

Suning Tesco (002024): Financial Services Out of the Table Drives Performance Growth and Waits for Improved Margin in Dual Line Model
Event: Suning Tesco released the forecast of the first three quarters of 2019. It is expected that the company will achieve net profit attributable to its mother in the first three quarters of 116.39-121.390,000 yuan, an increase of 89 in ten years.98% -98.14%, of which net profit attributable to mothers was 95-100 billion in the third quarter, which will increase 7582 in the future.54% -7986.89% of the main business is still under pressure, and the increase in capital contribution by Financial Services has significantly improved performance.The domestic consumption boom in the third quarter of 2019 is still weak. It is expected that the company’s main business revenue and net profit will still face some pressure.At the end of the third quarter, Suning Financial Services completed its capital increase and production expansion, and it is expected to increase the company’s net profit by approximately 10.2 billion US dollars, driving the company’s performance growth.Excluding Suning’s income from the statement and excluding other non-recurring gains and losses, the company’s main business net profit in the 北京养生会所 third quarter was about 200 to 700 million, which is expected to be last year (deducting non-net profit -2.5.6 billion). Completed the acquisition of 80% equity in Carrefour China to strengthen the FMCG supply chain.In total, the company completed the acquisition of 80% of Carrefour China with USD 4.8 billion. In 2018, Carrefour’s revenue in China was 299.6 trillion, turnover 4.1.2 billion.After the acquisition, the company’s FMCG supply chain was significantly strengthened. From the perspective of business synergy, the integration of Family Carrefour can connect with online supermarket channels to achieve O2O digital operation, the integration of Family Carrefour and Suning Store for business collaborative innovation, and the output of smart retail scene shaping capabilities.Improve the company’s overall scene format 杭州夜网 layout and explore multi-format integration. With the coordinated development of the two-line model, Suning is expected to realize the return of the king.In the long run, as the only e-commerce company with offline assets, extending offline resources and traffic will usher in a revaluation, transform comprehensive e-commerce, and deploy social e-commerce online with performance flexibility.With higher rankings of JD.com and Gome, Suning has unique offline operating advantages and integration capabilities of leading alternatives. The company’s gross profit margin and expense ratio are expected to further improve under the dual-line collaboration.At the same time, Suning has gradually developed a supply chain cooperation model, cooperating with upstream and downstream to establish a new type of zero supply relationship, improve the efficiency of the supply chain, build an intelligent supply chain, and realize the return of the king. Investment suggestion: Suning is currently estimated to be at a historically low level. According to the segment estimates, Suning’s market value space is about 180 billion yuan, maintaining the “strong recommendation-A” level. Risk warning: economic downside risks, fierce competition, omnichannel integration is less than expected, online growth rate.