Retail Industry: Overall performance depressed electric business fierce battle

The total retail sales of consumer goods "Twelve-Five" during the average annual growth of about 15%, from 2010 to 15.7 trillion yuan to 32 trillion yuan. "The recent" domestic Trade Development "Twelve-Five" planning, so that people in the retail industry in the current "winter" in the imagination of the spring-like warmth, may inspire them to overcome the immediate difficulties of determination.

Semi-annual reports show that the first half of 2012 commercial retail listed companies total operating income of 311.97 billion yuan, an increase of 13.5%, attributable to the parent company net profit of 10.48 billion yuan, down 7.5%. Analysis that the series of policies to stimulate consumption, real estate regulation, labor costs and the impact of the electricity business and the resulting price war, together led to a sluggish retail industry. And with the second half of the economic stability rebound, retail revenue growth is expected to be better than the first half.

Overall profitability continues to decline

Retail sales have been dismal in the first half of the year. The total operating income of each sub-plate increased in varying degrees, but the net profit declined sharply. Even the most resistant to the economic downturn of the supermarket industry has also been a serious decline, the overall net profit of only 720 million yuan, the year-on-year decline of 24.6%.

Specifically, the Department of general merchandise sector profit level has been lower. The first half of the total operating income amounted to 133.982 billion yuan, an increase of 9.52%, attributable to the parent company net profit of 6.1 billion yuan, an increase of 8.4%. From the historical data, since 2008, the level of general merchandise industry has fallen from the high point, the profit level has been lower. It is worth mentioning that the regional division of department stores is obvious, the coastal developed areas of net profit growth depressed, midwest companies relatively good.

And the yield of the supermarket plate is far below the industry overall level. The first half of the total total operating income of supermarkets 43.48 billion yuan, an increase of 18.9% per cent, attributable to the parent company net profit of 720 million yuan, down 24.6% per cent, the decline than the industry as a whole more than 17.1%, only more than 40% of supermarkets to achieve net profit is growing.

However, the most brutal when the home appliance chain plate. In the first half, including the electrical chain, the professional chain plate income growth of 17.98%, just need characteristics and home appliances chain of online sales to a certain extent to ensure the relatively high operating income, and the same period attributable to the parent company's net profits fell more than 30% year-on-year. Data show that Suning appliances (002024, shares) the first half of the operating income of 47.2 billion yuan, an increase of 6.7%, attributable to the listed company shareholders of the net profit of 1.74 billion yuan, down 29.5%. Gome is even worse. The first half of the operating income of 23.1 billion yuan, down 22.4%, belong to the listed company shareholders net profit-500 million yuan, down 140%. The plate becomes the most prominent sub plate in the transition period of upstream extension and the downstream virtual-reality linkage model under the background of "price war", and it is also a sub plate of net profit decline.

"Bad weather" leads to industry slump

Retailing is seen as a "plant" industry, and its development is heavily dependent on climate change. The first half of this year's climate is unusually bad-the financial crisis after the Government to stimulate consumption of a series of policy cancellation, the regulation of real estate, including rent, labor costs of a sharp rise. Together, these factors have led to a sluggish retail business.

In fact, since the financial crisis, in the "4 trillion investment", home appliances preferential policies such as the impact of incentives, the retail industry has experienced a "feast." Data show that in 2008, the retail business revenue and net profit growth rate of 17% and 5% respectively. After the stimulus, retail sales and net profit growth rates rebounded rapidly, to 2010 years of business income growth of 25%, and net profit growth rate climbed to 38%. But the industry has been on the decline since.

"In the middle of 2010, the whole industry peaked, gross profit margin reached 18.09%, net profit margin of 4.21%." After that, the net profit margins of retail companies fell faster, and in the first half of this year the net profit margins of retail companies slid to 3.47%, at a stage of accelerated decline. "It is said by insiders.

For the cause of the accelerated decline in the performance, there is analysis that, in the economic downturn in the environment, the supermarket and professional chain stores by labor costs and rents rise, the impact of electric power, electrical chain by the serious impact of online shopping, seriously eroded the retail trade is not high net profit margin.

Data show that department stores, supermarkets, multi-state retail sales in the two-quarter cost rate of 13.81%, 16.02%, 13.64%, compared to the first quarter of the quarter-on-quarter increase of 2.13, 1.25, 1.32%. Overall, the period of the increase in the cost rate swallowed up the rise in gross profit margin caused by net interest rate increases, two quarterly industry net interest rate of 4.04%, than the first quarter reduction of 0.59%, profitability continued to decline.

The cause of the sharp decline in the profit of household appliance chain enterprises mainly comes from the impact of the electric power companies and the price war. Dongxing Securities that the home appliance plate as the highest level of competition, the price war has undoubtedly exacerbated the effect of Matthew's differentiation, which is the main cause of the overall gross margin of the industry's 1.1%. There are also analysis that the subsidy cancellation, real estate decline, net purchase price war to the home appliance chain enterprises bring greater impact, followed by a variety of policies to bring the medium-term higher costs, such as suning has greatly increased the cost of Su Ning Yi investment.

In addition, there are also analysis that the appliance manufacturers in order to get rid of the dependence on the channel, strengthen their ability to grasp the supply chain terminals, in recent years has been seeking to build channels or open up other new channels. This to a certain extent also robbed the home appliance chain market share.

Performance is expected to improve gradually

In the second half of the year, most of the industry believes that the overall retail revenue growth should gradually better in the first half. China Merchants Securities (600999, shares bar) analyst Yang Xia that standing in the three quarter of the period of time to see the whole year, the future economic uncertainty has not been eliminated, the recovery rate will be more smooth, but the trend to change, coupled with nearly four quarters, in the promotional activities, the second half of the overall income growth should gradually better in the first half.

"Supermarkets have a certain degree of defense, in the context of CPI downward expansion can still maintain rapid growth, short-term supermarket expansion is facing the pressure of growth, but relying on the construction of logistics, improve the proportion of direct mining, development of their own brands, adjust commodity structure, the profitability of the supermarket is expected to continue to improve. "Great Wall Securities analyst Yiu Wenqi said that the four quarter is the traditional consumption season, with the Mid-Autumn Festival and National Day Holidays, and the arrival of the Ministry of Commerce is also brewing a new round of consumer stimulus policy, as long as the macroeconomic does not continue to deteriorate, the department store consumer demand will gradually improve, is expected to

And from the retail sector performance, this year, the retail sector as a whole run the Shanghai 300, the plate valuation at a historical low point. Data show that 2012 1 ~ August, Haitong Retail index ran 300 about 11.5%, of which only 3, 6 and August received excess income, the current plate P/E ratio than the Shanghai 300 premium 1.63 times times. In the past two years, the retail sector continued to adjust significantly, the current plate valuation of less than 17 times times, at the historical bottom level.

Dongguan securities that, starting from the four quarter of last year, industry growth has been significantly reduced, if the economy can start to rebound in the four quarter, then in the low base, the retail companies after the four quarter performance improvement will be more significant. National specific consumer policy measures are expected to be gradually introduced. Real improvement and policy stimulus from the fundamentals are expected to drive industry valuations to rise.

Societe Generale Securities (601377, shares bar) analyst to, the short-term view of the current plate to interpret the overall market is still a lack of catalysts. July consumer data again depressed make plate lack of breakthrough upward momentum, 7、8、9月 for the industry off-season, combined with the current market overall situation, judging plate in the next 1 months will be in the consolidation phase.