20131023-DBS_Group-Clearer_corporate_strategies_11页_431kb

报告摘要

GOME Summary: Buy Recommendation and Strategic Outlook

Core Content and Key Information

GOME, a leading retailer of consumer electronics and appliances in China, has been the focus of a detailed analysis by DBS Group Research. The report highlights the company's strategic initiatives and performance improvements, leading to a Buy recommendation with a 12-month price target of HK$1.45.

Main Points

Corporate Day Event: The event provided clarity on GOME's strategies, particularly in store operations and E-Commerce, reinforcing the company's ability to recover and grow.
Profitability Improvement: Better profitability from store operations and a turnaround in the E-Commerce division are seen as key catalysts for the stock.
Earnings Outlook: The FY13/14F net profits are expected to be 18% / 25% higher than the Bloomberg consensus, showing a positive business outlook.
Price Target: The updated price target of HK$1.45 is based on a 1.1x FY14 PB valuation, up from the previous HK$1.35.

Analysts

Mark LI: +852 2971 1935 | mark_li@hk.ddsvickers.com
Mavis HUI: +852 2863 8879 | mavis_hui@hk.dbsvickers.com

Financial Forecasts

Metric	2012A	2013F	2014F	2015F
Turnover (RMB m)	47,867	54,733	61,504	69,170
EBITDA (RMB m)	(441)	1,249	1,952	2,206
Pre-tax Profit (RMB m)	(654)	905	1,552	1,746
Net Profit (RMB m)	(597)	758	1,153	1,288
EPS (HK$)	(0.04)	0.06	0.09	0.10
EPS Growth (%)	N/A	N/A	52.1	11.7
Net Dividend Yield (%)	0.0	1.5	2.3	2.6
P/Book Value (X)	1.0	1.0	0.9	0.9
PE (X)	nm	19.9	13.1	11.7

Operating Strategies

Store Operations: GOME aims to improve store performance by offering greater discounts on best-selling products of online competitors and enhancing the shopping experience through brand counters and price comparison tools.
E-Commerce Division: The company is focusing on improving user experience, integrating online and offline operations, and expanding into new product categories.
Logistics: GOME has over 400 logistics centers and has formed strategic partnerships with major brands to enhance supply chain efficiency.
Inventory Management: The adoption of the SAP ERP system allows for better inventory monitoring and management, reducing impairment losses and improving margins.

Earnings and Performance

3Q13 Performance: Expected to report RMB240m net profit with a 1.8% net margin, up from a RMB200m net loss in 3Q12.
Earnings Growth: The report raises FY13-15F earnings by 13% / 8% / 5%, respectively, based on improved business outlook.
Store Revamp: Approximately 10 flagship stores have been revamped, with plans to revamp 300 stores over the coming years, investing RMB600m.

Valuation and Metrics

PE Band Chart: Indicates a valuation of 11.7x for FY14.
PB Band Chart: Suggests a 1.1x FY14 PB valuation.
ROAE (%): Expected to increase from 4.9% in 2013F to 7.5% in 2015F.
Net Debt/Equity: Maintained at CASH for all periods.
Z-Score: Indicates a 2.3x for FY14 and FY15F, suggesting a relatively stable financial position.

Key Financial Highlights

Revenue Growth: Expected to grow by 14.3% in 2013F, with a 12.4% growth in 2014F and 12.5% in 2015F.
Gross Margin: Projected to increase to 15.6% in 2015F.
Net Profit Margin: Expected to rise to 1.9% in 2015F.
Capital Expenditure: Expected to reach RMB1.2bn starting FY14, up from RMB800m in FY12-13.

Dividend and Shareholder Information

Major Shareholders: Include Wong Kwong Yu (32.1%), Bain Capital (9.9%), Morgan Stanley (7.2%), BlackRock (6.3%), and Carmignac Gestion (5.0%).
Free Float: 39.5%.
Dividend Payout Ratio: Expected to be 30.0% for FY14 and FY15F.
Dividends per Share (HK$): Expected to increase from 0.02 in 2013F to 0.03 in 2014F and 0.03 in 2015F.

Conclusion

The report maintains a Buy recommendation, citing improved store performance, E-Commerce turnaround, and better financial metrics. The price target of HK$1.45 is based on a 1.1x FY14 PB valuation, reflecting confidence in the company's recovery and growth potential.

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