Jiajiayue (603708) Commentary on Major Issues: Expansion of Pan-regional Expansion in Anhui and Huaibei Markets

Jiajiayue (603708) Commentary on Major Issues: Expansion of Pan-regional Expansion in Anhui and Huaibei Markets

The company intends to enter the Anhui Huaibei market through acquisitions, mergers and acquisitions, two-pronged independent exhibition stores, and accelerated pan-regional expansion.


100 million investment holds 75% equity of Lexin Trading.

The company has a number of investment agreements with Awesome Group, Dai Wen, Liu Yonghong, and Lexin Commercial. Liu Yonghong allocated 100% to Awesome Group after setting up Lexin Commercial with cash and two property investments.The operating assets, debts and real estate related to the supermarket business are invested in Lexin Commerce and the company intends to use its own funds2.

100 million investment holds 75% of the equity of Lexin Trading, of which the transferee equity is worth 70 million yuan, and the capital of Lexin Trading is increased by 1%.


   Enter the Anhui Huaibei market by acquisition, and it is estimated that it corresponds to 0 before the investment.

21 times PS.

The target company has 31 supermarket stores in Huaibei, with a total area of 10.

90,000 square meters, with its own logistics center and food processing plant (assessed value of 1.

800 million).

In 2018/2019 Q1-Q3, the target company’s operating income was 6 respectively.

700 million / 5.

500 million, net profit 深圳桑拿网 was -29.33 million / -24.8 million.

After the investment, the original target store will be renamed from “Happy Awesome” to “Jiayue Awesome”.

Based on 2018 operating income, it is estimated to correspond to 0 before the investment.

21 times PS.

   Supply chain output, integration and efficiency can be expected.

As the leader of the Shandong regional supermarket, the company has expanded its advantages in the supply chain of fresh produce. However, the acquisition of Qingdao Wiker, Hebei Jiayue has achieved certain results. From the first quarter to the third quarter of 2019, Hebei Jiayue continued to expand by about 20 million yuan.It is expected to decrease by about 25 million yuan; Qingdao Weiqi is expected to make 15 million in 2019?
20 million yuan; relevant merger and acquisition integration experience promotes 上海夜网论坛 replication to the Huaibei market.

In addition, Huaibei is only a 5-hour drive from Laiwu. Laiwu has room temperature logistics, fresh logistics and fresh processing centers, which will effectively connect with Huaibei stores and provide supply chain output. Integration and efficiency can be expected.

   Mergers and acquisitions, independent exhibition stores, two-pronged approach, pan-regional expansion accelerated.

The company deeply cultivated the Jiaodong Peninsula and encrypted it in the hinterland of Luzhong and Luxi; merged with Zhangjiakou Fuyuexiang, and accelerated the integration of Qingdao wikis. The company also accelerated the progress of independent exhibition stores in flooded areas. It has successively selected stores in Inner Mongolia, Lianyungang, and other stores. During the yearIt is expected to start, and the general area expansion logic is gradually verified.

   Risk factors: store expansion, new store cultivation, merger and acquisition integration are not up to expectations; new business formats, start-up companies diversion.

   Investment suggestion: As the transaction has not yet been completed, we will not consider the impact of mergers and acquisitions on the company’s performance for the time being. Maintain the operating income forecast for 2019-21 to 150.

0 billion / 168.

300 million / 191.

3 trillion, maintain the vested net profit forecast for 2019-21 to 4.

5 billion / 5.

4 billion / 6.

60,000 yuan, corresponding to non-net profit growth rate of +15.

7% / + 20.

3% / + 20.

5%, EPS is 0.



08 yuan.

It is expected that after the integration of the project in 2020, the loss will be significantly reduced or basically flattened, which will have limited impact on the company’s performance, and the transformation variable to the pan-regional leader will remain unchanged, maintaining the “Buy” rating.