Wumart posted its 1Q12 unaudited PRC G AAP financial results. During the period, the Company’s operating revenue was RMB 4,833.6m; operating profit was RMB 2,894.2m; net profit attribut able to shareholders reached RMB 205.3m.
Wumart had not published PRC GAAP quarterly results be fore, the publish of the 1Q12 PRC GAAP results was required by the regulatory author ities, with respect to the issuance of t he RMB 500m 1-year short-term financing bill on 28th Feb 2012. We believe there is no guarantee of any futu re publishing of same type of results, and the 1Q12 unaudited PRC GAAP financial results have little comparability with other regular results and their associate estimates.
The management revealed earlier that the SSS growth for the period of Jan-Feb 2012 was approx. 8%, then it further dropped to low-single digit in March, the drop was mainly due to a high base in March last year which was caused by a sharp rise in CPI. Consequently Wumart’s 1Q12 SSS growth was 6-7%. The management guided the FY12 SSS growth to be around 8%, we believe the social retail sales will be benefited by favourable policies and rebounded consumer sentiments, t herefore the SSS growth guidance in our view is still achievable. The company is currently trading at HK$ 17.94, equivalent to 24.8x FY12 PE, or 5.1x FY12 PBR. We maintain “Accumulate” rating and target price of HK$ 19.85. Target price translates to a 27.5x FY12 PE, 22.4x FY13 PE, 5.6x FY12 PBR, 4.9x FY13 PBR, or 1.2x FY11 - 14 PEG.