The 20 Years Of The Jiaodong Peninsula'S Stake In Liqun, The First Three Quarters Of Business Income Close To 9 Billion!

The three quarterly report of Liqun commercial group Limited by Share Ltd (hereinafter referred to as "Liqun") disclosed on October 17th evening showed that the company's operating income in the first three quarters of the company was 9 billion 399 million yuan, an increase of 13.29% over the same period last year, and the net profit attributable to shareholders of listed companies was 215 million yuan, down 27.52% compared to the same period.


Li group explained that the growth of business revenue was mainly due to the growth of new stores and sales of existing stores. The decline of the company's performance was mainly due to the loss of stores in the era of new Kai Li group after the acquisition of Lotte Mart East China regional stores.


Liqun shares said that due to the shorter opening time, the group was in the stage of market training and development, and the cost of early investment was larger, resulting in a loss. However, the loss was significantly reduced compared with the first half of 2019, and the operating condition of the store continued to improve.


From the third quarter's operating data, East China regional stores contributed 275 million yuan in business revenue, an increase of 96.36% over the same period. In terms of gross profit margin, East China region was further improved on the basis of gross profit margin of 10.33% in the first half of the year, and gross profit margin reached 14.24% in the third quarter.


Public information shows that Liqun shares, formerly known as the Chinese time-honored brand "De Yuan Tai Bai store", was founded in 1930s. In 1998, the company built a group of shopping malls, including shopping, entertainment, catering and accommodation, and became a large retail enterprise. In February 2018, in order to better cover the real business of the company, the company was renamed the Limited by Share Ltd of Liqun commercial group again, and acquired the East China regional store of Lotte in May 2018.


From the area of the 72 shops, 54 are in Jiangsu, 4 in Zhejiang, 8 in Anhui, 4 in Shandong and 2 in Shanghai. This acquisition can enable Liqun shares to radiate four regional markets in Jiangsu, Anhui, Zhejiang and Shanghai, and achieve a significant expansion in the scale of operation. Liqun shares purchase regional commercial groups one by one from four commercial areas outside the province. The acquisition of Lotte's regional stores in East China was first established in Jiangsu, and the retail sales in Jiangsu era were acquired by Lotte in 2009.


Liqun shares cross the commercial retail, logistics and distribution and other fields, and establish a comprehensive retail business mode of "department stores, supermarkets and electrical appliances". Over the past 20 years, the company has made intensive efforts in the market of Qingdao and the surrounding Jiaodong Peninsula, and has become a regional business leader.


In September 2017, Liqun shares opened the first large shopping mall outside Lianyungang, Lianyungang Liqun square, and opened the strategy of "going out". The company has shown the ambition of transforming the regional leader to the national chain. In May 2018, the company issued a notice to acquire 1 billion 665 million subsidiaries of Lotte shopping (Hongkong) Holdings Limited and 12 outlets in Jiangsu, Zhejiang, Shanghai and other places with a total of RMB $72. The company is facing the opportunity of large-scale extension and development, and it is expected to expand the regional business to the layout of multi provinces.


At present, Liqun group Limited by Share Ltd is the largest shareholder of Liqun group, and Qingdao Jun Tai Fund Investment Co., Ltd. has 68.34% stake in Liqun group Limited by Share Ltd. Liqun group Limited by Share Ltd owns 100% of Qingdao Liqun Investment Co., Ltd. Xu Gongzao is one of the actual controllers of the company. Xu Gongzao is the largest shareholder of Qingdao Jun Tai Fund Investment Co., Ltd., the second largest shareholder of Liqun group Limited by Share Ltd. Xu Gongzao, Cao Lijuan and Wang Jian are directors of Limited by Share Ltd of Liqun group, and Wang Jian is the senior manager of Liqun group Limited by Share Ltd.


According to the financial report, in the first half of 2019, Liqun shares realized business income of 6 billion 519 million yuan, an increase of 15.91% over the same period last year, and realized a net profit of 170 million yuan, down 39.49% from the same period last year. Excluding the loss of new sales report in the era of Li group, the company's original stores and wholesale logistics business achieved 5 billion 755 million yuan, up 2.34% over the same period last year, and realized net profit of 381 million yuan, up 35.26% over the same period.


In the first half of 2019, the stores in Liqun times achieved operating income of 764 million yuan, due to the shorter opening time of stores, the longer market incubation period required for new stores, and the higher investment cost in the first half of the year, resulting in a loss in the first half of 2019. However, the loss margin gradually narrowed down, and some stores were profitable, and the operating conditions of the stores continued to improve.


Stores, 57 convenience stores and 9 "Fuji farm" fresh community shops, with a total operating area of over 2 million square meters, are located in Qingdao, Yantai, Weihai, Rizhao, Dongying, Zibo, Weifang, Zaozhuang and other cities in East China, including Jiangsu, Anhui, Anhui and other East China provinces and cities. The business format covers various business formats, such as integrated shopping malls, shopping centers, comprehensive supermarkets, convenience stores, fresh community stores, category stores, etc., and O2O and B2B online formats. It also forms a collectivization business development pattern supplemented by comprehensive supermarkets, convenience stores, fresh community stores and collection stores of all kinds, with the flagship of the mid and high end commercial complex as the center, and the shopping mall as the center store. By the end of the reporting period, Liqun shares had 86 large retail outlets.


The industry believes that the era of Liqun rooted in Qingdao, radiation Shandong, a solid foundation. The acquisition of Lotte stores accelerated cross regional expansion. Abundant brand resources and strong supply chain system will ensure the success rate of cross regional expansion.


Chen Wenqian, a securities analyst in the new era, said earlier that Lotte's sale to Liqun shares in East China was 1 million 186 thousand and 700 square meters and that the Li group joint-stock plan actually opened about 940 thousand square meters, accounting for about 80% of the total operating area in East China. In terms of income data, due to the influence of consumers' boycott in 2017, most of the Lotte shops stopped at Hua men store, and 7 billion 160 million yuan (RMB) in Lotte in 2016 (in 2016, the historical exchange rate was 173.702016 years in December, which had been affected by Hua men store). The business receipts were the basis of the forecast. The 72 shops sold to Liqun in 2016 were sold for about 4 billion 700 million yuan in total. It is estimated that more than 50 stores will open in 2019 before the Spring Festival, and annual sales will be roughly estimated at around 3 billion 800 million (38=47*0.8).


According to Chen Wenqian analysis, the East China region is the trial area of the new retail format of Internet enterprises and retail enterprises. The competition is fierce, the regional operation management mode of Liqun group, the experience of store management and selection, the ability to integrate resources and the acceptance of consumers will affect the operation effect of the company. But generally speaking, the acquisition of Lotte stores can not only solve all kinds of social contradictions hidden during the Lotte's shutdown, but also the group will enter the four markets of Jiangsu, Anhui, Zhejiang and Shanghai for a single time, providing a new growth bright spot for the profits of Liqun shares.