Ordinary people (603883) 19th quarterly report comment： the impact of equity incentives to break through actual performance to accelerate
Ordinary people (603883) 19th quarterly report comment: the impact of equity incentives to break through actual performance to accelerate
Event: The company announced the 2019 semi-annual report, reporting a series of realized operating income83.700,000 yuan, an increase of 23 over the same period last year.59%; net profit attributable to mother 3.0.94 million yuan, an increase of 21 over the same period last year.44%; net profit deducted from non-attributed mothers 3.730,000 yuan, an increase of 20 over the same period last year.42%. Highlights of the report: The performance was in line with expectations, and the increase in fair incentive expenses was attributed to the mother’s net profit growth rate of 27.58% reported that the merged company had implemented an equity incentive plan, and the booth costs incurred were gradually calculated at approximately 1551.450,000 yuan, the impact on the company’s 四川耍耍网 net profit.If the expenses are added back, the company’s net profit attributable to the parent in the first three quarters is 4.100,000 yuan, an increase of 26 over the same period last year.The growth rate of net profit attributable to mothers in the third quarter alone was 23%.58%, showing acceleration.The implementation of the equity incentive plan will only have an impact on the company’s performance in the short term. In the long run, the equity incentive plan will effectively promote the company’s development, and the company’s performance improvement brought about by the incentive plan will far exceed the cost increase caused by it. The number of franchise stores continued to rise, and the gross profit margin of the revenue expansion slightly shortened to the end of the third quarter of 2019. The company has 3,756 directly operated stores and 1,052 franchised stores. The report added a total of 536 direct and M & A stores and 477 new franchise stores.In the third quarter, the company added 108 direct-operating and M & A stores and 146 new franchise stores. The franchise model continued to accelerate the continuous expansion of the company’s revenue scale and channel sinking.However, due to the reset of the gross profit margin obtained by the common people under the franchise store model, the company’s overall gross profit margin was 33.89%, a decrease from the same period last year.67 points. The regional advantages of East China and Central China have been consolidated, and the Northwest region looks forward to the follow-up efforts of the company to adhere to the national layout and has entered 21 provinces and municipalities across the country.The reported companies in the strong regions of East China and Central China experienced relatively rapid revenue growth, reaching 29 respectively.39% / 26.05%, higher than the company’s average growth rate.In the absence of large-scale mergers and acquisitions, the company further consolidated its influence in advantageous areas. In other regions, the income growth rate in the central and northwestern regions is slowly 11.81%, the company gradually expected to use franchise stores, mergers and acquisitions and other methods to expand the region’s revenue scale. Investment advice and profit forecast The company’s franchise model helped sink the channel, opening large stores to increase same-store growth, and multiple forward-looking layouts are expected to gradually yield results.The number of stores is expected to accelerate in the next two to three years. Through the expansion period, stores will gradually enter the mature period, and profits will enter a period of rapid growth.It is estimated that the company’s net profit attributable to its parent in 2019-2021 will be: 5.24, 6.58 and 8.27 trillion, the corresponding basic profit income is: 1.84, 2.31 and 2.90 yuan / share, corresponding to the current maximum PE is 37, 29 and 23 times.Maintain target price of 85.5 yuan / share, upgrade the company’s investment rating to “buy”. Risks suggest that industry competition is intensifying, mergers and acquisitions have failed, and industry policies have changed.