Suning Tesco huge loss, sales and procurement scale declined significantly, the agency said the impact of capital strength

After the close of the market on February 7, Suning Shopping released the “Zhongxin International on the concern of Suning Shopping Group Co., LTD. 2021 annual performance loss notice”, caused the attention of investors.On January 29, 2022, Suning Tesco released suning Group Co., LTD. 2021 Annual Performance Forecast (hereinafter referred to as “Performance Forecast”), which said that net profit loss attributable to shareholders of listed companies in 2021 is expected to be 42.3 billion to 43.3 billion yuan,The net profit loss attributable to shareholders of listed companies after deducting non-recurring gains and losses was 43.9 billion to 44.9 billion yuan, which increased significantly year-on-year.As for the changes in the company’s performance, Suning Said, first, based on the changes in the external environment and the company’s own operation, the company made provisions for impairment of related assets and recognized investment losses based on the principle of prudence.It is expected to reduce the company’s net profit attributable to shareholders of listed companies in 2021 by 25.475.1 billion yuan (among which, 443 million yuan has been reflected in the first three quarters);Second, since June 2021, due to the continuous shortage of liquidity, the company has suffered a serious shortage of commodity inventory, and the sales and procurement scale have declined significantly at the same time, leading to a significant decline in operating profit.At the same time, the business strategy of some subsidiaries has been adjusted, resulting in the decrease of taxable income used to offset deductible losses in the future, and the corresponding transfer back to deferred income tax assets, which is expected to reduce the company’s net profit attributable to shareholders of listed companies in 2021 to 8.5 billion to 9 billion yuan.The above items will reduce the company’s net profit of 33.975 billion to 34.475 billion yuan attributable to shareholders of listed companies in 2021.However, Suning Yigou stressed that the company in 2021 a series of impairment matters do not affect the current company’s cash flow level, also does not affect the current daily operations and the development of business cooperation.The company will continue to recover funds through various paths and methods and minimize the loss to the company as much as possible.However, Zhongxin international believes that the huge loss of Suning’s performance in 2021 will adversely affect its capital strength and financial leverage.Zhongxin International will continue to maintain close communication with Suning And timely assess the impact of the above matters on Suning’s future operations and overall credit standing.It is understood that in early July in 2021 in jiangsu province, nanjing government support, Su Ningyi bought to introduce new strategic investors, under the leadership of the board of directors of the new, restore the production and operation enterprises to actively carry out, enterprise internal implementation of “retail service providers, and stronger, and optimize supply chain management quality” three major strategies, promoting income, authors and effect to work,In the third and fourth quarters of 2021, the business performance improved quarter-on-quarter, and the enterprise gradually resumed operations.In late August 2021, with the stabilization of bank-enterprise cooperation and incremental credit granting by Bank of Jiangsu and Bank of Nanjing, suning’s liquidity gradually recovered and sales revenue gradually increased with the support of major brand owners.From September to November, sales increased monthly and stabilized. In the fourth quarter, commodity sales revenue is expected to increase by 25.48% compared with the third quarter. Meanwhile, Suning Tesco has strict and refined management, strictly controlled various costs, streamlined organization and improved human efficiency.With the support of all parties and the unremitting efforts of all staff, Suning Tesco’s business situation has gradually improved.In order to make a more intuitive evaluation of the recovery of the company’s operating cash flow, without considering the influence of factors related to non-operating cash flow, according to the statistics of the company’s financial department, the monthly EBITDA of Suning Shopping in November was 2.08 billion yuan, which turned positive and remained positive in December.”2021 is the beginning of the transformation of Suning Tesco into a retail service provider, facing huge difficulties, but the team is still seeking breakthroughs in the difficult situation, continuous channel improvement, market sinking, for the recovery of sales and sustainable growth of the company.”Suning said that the retail cloud business continued to maintain rapid development in 2021. During the reporting period, 2678 new franchise stores were opened, and home furnishing and quick repair track were expanded. By the end of the reporting period, there were 9178 franchise stores of Suning retail cloud.It is understood that in 2022, with the support of Jiangsu Provincial government and under the leadership of the new board of directors, Suning Tesco will implement the three strategies of “doing a good job as a retail service provider, strengthening the supply chain and optimizing the quality of operation”. The company will continue to promote revenue growth, cost reduction and efficiency improvement, and revitalize assets.In terms of income growth, Suning Focuses on the core 3C business of home appliances, gives full play to the company’s online and offline integration ability in scene experience, strengthens its supply chain integration ability in customized products, and highlights its service performance ability in overall solutions.The channel side will further tap the potential of the sinking market and continue to accelerate the development of retail cloud business and benefit improvement.In terms of cost reduction and efficiency improvement, Suning Tesco will combine the current market situation and vigorously promote the reduction of store rent level and the improvement of store floor efficiency through store model optimization.Through the construction of incentive system and internal enabling system to further improve organizational efficiency and team output efficiency, reduce the cost level;Through more effective cross-enabling cooperation, further improve the precision and input-output level in user acquisition and marketing.In terms of asset revitalization, the company systematically established various special work organizations, continuously promoted the fund operation of commercial property and logistics assets, strengthened the withdrawal and return of foreign investment equity, accelerated the recovery of cash flow of the company, promoted the recovery of zero-supply relationship, and improved the income scale and business performance.In this regard, Suning Revealed that the company is expected to turn positive EBITDA in the first quarter of 2022 after completing the phased goal of turning positive monthly EBITDA in November 2021, combined with the above measures and without considering the influence of factors related to non-operating cash flow.

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