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Backgammon (002251): Shares in Chongqing Trading Company to participate in mixed reform of state-owned enterprises

Event: Chongqing Department Store’s controlling shareholder Chongqing Commercial Corporation confirms mixed reform, Primer, BBK shares in June 21, 2019, Chongqing Department Store issued an announcement that its controlling shareholder Chongqing Commercial Corporation confirmed 45% equity investment dated by Chongqing Commercial Corporation’s mixed ownership reform to increase capitalFangmei is Wumart, and 10% equity investors are backgammon.

After the completion of the mixed reform, Chongqing Commercial Corporation will be changed from Chongqing State-owned Assets Supervision and Administration Commission to wholly owned by Chongqing State-owned Assets Supervision and Administration Commission, 45% owned by Chongqing State-owned Assets Supervision and Administration Commission, Wumart Group held 45%, and BBK Group held 10%.Actual control over Chongqing trading company.

At the same time, Chongqing Commercial Co., Ltd. intends to issue a comprehensive offer to all shareholders of unrestricted circulating 西安耍耍网 shares except Chongqing Co.

The offer price is 27.

16 yuan / share (current price is 32.

26 yuan / share).

The price of the indirect ownership of the mixed-investment investor in Chongqing Department Store was 25.

52 yuan / share.

Chongqing Commercial Corporation, which is the sole retail listing platform of Chongqing state-owned assets, is the western retail leader with a higher overall consumption level in Chongqing.

Located along the “Belt and Road”, there are important political, economic systems and consumer vitality.

Chongqing Trading Company was established in 1996. It is a wholly-owned subsidiary of Chongqing State-owned Assets Supervision and Administration Commission and the largest trade and distribution group in western China.

According to CCFA’s “2018 Top 100 Chinese Chains”, Chongqing Trading Company ranks 8th.

The business format covers department stores, supermarkets, electrical appliances, automobile trade, import and export trade and consumer finance, supply chain finance, quality inspection, etc., with sales income of 674 in 2018.

8.9 billion, realizing taxes and profits22.

3.5 billion.

Chongqing Commercial Corporation holds Chongqing Department Store, the only retail listing platform affiliated to Chongqing State-owned Assets Management 45.

05% equity.

Chongqing Department Store has a relatively complete business chain, covering the operating pattern of multi-format development such as department stores, supermarkets, appliances, and automobile trade, and has cultivated emerging industries such as e-commerce, consumer finance, and supply chain finance.

The stores are mainly concentrated in Chongqing.

As of December 31, 2018, there were 310 outlets in Chongqing Department Store.

Among them, 55 are department stores, 177 are supermarkets, 48 are electrical appliance chains, and 30 are auto trade formats.

Revenue of 340 in 2018.

8.4 billion, net profit attributable to mother 8.

3.1 billion.

BBK’s acquisition of Chongqing Trading Company is expected to further increase the scale of its performance. Maintaining a “recommended” rating BBK is similar to the main business of Chongqing Trading Company, and its stores can complement each other in terms of geographical location.

BBK’s main business activities are the sales of consumer goods such as supermarkets, department stores, and appliances. It has developed into a leading regional enterprise in Hunan Province and has dense business outlets around Hunan.

Since 2014, BBK has successively acquired Guangxi Southwest City Department Store, Hunan Xinlianxin Supermarket Store, Sichuan Mexi Department Store, and Jiarunduo Supermarket.

The strategic deployment of “Realizing Hunan, Quickly Strengthening Guangxi, and Doing Well Jiangxi and Sichuan” has been completed.

The first release, through the holding of Chongqing Commercial Corporation, gradually realized the resources of Chongqing Commercial Corporation and empowered the company’s Sichuan business.

For the time being, regardless of the performance impact caused by the acquisition of Chongqing Trading Company, we expect the company’s EPS to be 0 in 2019-2021.

25 yuan, 0.

30 yuan and 0.

41 yuan, maintaining the company’s “recommended” rating.

Risk Warning: Macroeconomic Risks; Downside Consumption Risks; Company Performance Is Less Than Expected