Jiajiayue (603708) Announcement Review: Acquisition of Huaibei Lexin Commercial and Cross-regional Expansion

Jiajiayue (603708) Announcement Review: Acquisition of Huaibei Lexin Commercial and Cross-regional Expansion

After acquiring 75% equity of Lexin Commercial, after entering the Hebei market, it expanded again into the Anhui market across regions.

The company issued an announcement intending to use its own funds2.

100 million US dollars, through the transfer of equity and capital increase to acquire 75% equity of Huaibei Lexin Commercial.

According to the agreement, Liu Yonghong (shareholder of Awesome Group) invested in cash and two commercial properties to set up Lexin Business, and converted 100% of Lexin Business to Awesome Group. Awesome Group will operate in Huaibei City related to supermarket businessSex assets, debts and real estate are invested in Lexin Trading.

In 2018, the awesome group’s assets involved in restructuring achieved total revenue6.

67 trillion, expected about 0.

Based on this, it is estimated 杭州夜网 that the 18-year PS corresponding to the acquired assets is estimated to be 0.

42X (not considering Liu Yonghong’s two commercial properties).

During the transition of the target asset, the income generated is returned to the shareholders in accordance with the proportion of capital contribution, or for the purpose of operation, the counterparty is compensated to the target company in cash.

Cross-regional expansion is another city. Fuyuexiang Supermarket successfully transformed and provided integrated samples.

The company announcement shows that Awesome Group currently has 31 direct-operated chain stores in Huaibei City. The operating format is mainly supermarkets, with an average single store area of about 3500 square meters.Influence, after the investment, the target company’s store brand has been changed to “Jiayue 北京桑拿洗浴 Awesome”; meanwhile, the target asset has a logistics center and a food processing plant supporting the development of the supermarket business, a total of about 11.

30,000 square meters.

The Zhangjiakou Fuyuexiang Supermarket acquired by the company was consolidated in 1Q19, and its successful transformation experience is obvious.

Profit forecast and investment advice.

The company focuses on community fresh supermarkets, with steady growth in the same store. Considering the full roll-out of the partnership system, continuous strengthening of supply chain integration, and gradual improvement of logistics and warehousing. Revenue from same stores in various industries will continue to increase steadily.5,

0 billion, 5.

9.8 billion, 7.

2 ppm, EPS is 0.

82, 0.

98, 1.

18 yuan (regardless of the consolidation of Lexin’s commerce and trade business for the time being), the company will be given 35X PE for 19 years with reference to the estimated level of comparable companies, corresponding to a reasonable value of 28.

78 yuan / share, maintaining the “overweight” rating.

Risk warning: The integration effect of the newly acquired business is less than expected; national leaders such as Yonghui Supermarket enter the Shandong market; the new retail layout of the Internet giants intensifies competition in the retail market.