| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 27.07 | 10 |
| Intrinsic value (DCF) | 19.73 | -20 |
| Graham-Dodd Method | 9.50 | -61 |
| Graham Formula | n/a |
Chongqing Department Store Co., Ltd. is a prominent Chinese retail conglomerate operating department stores, supermarkets, and electrical appliance stores across southwestern China. Founded in 1950 and headquartered in Chongqing, the company has established a strong regional presence with approximately 300 outlets spanning Chongqing, Sichuan, Guizhou, Hubei, and neighboring provinces. As a comprehensive retailer, the company also engages in automobile trading, offering diverse consumer products and services. Operating in the consumer cyclical sector, Chongqing Department Store leverages its extensive store network and multi-format retail strategy to serve China's growing consumer market. The company's long-standing history and regional dominance position it as a key player in China's retail landscape, particularly in the less saturated western regions where it enjoys first-mover advantages and local market expertise.
Chongqing Department Store presents a mixed investment case with both attractive fundamentals and sector-specific challenges. The company demonstrates solid profitability with net income of CNY 1.31 billion on revenue of CNY 17.14 billion, representing a healthy 7.7% net margin. Strong operating cash flow of CNY 2.02 billion and a substantial cash position of CNY 4.85 billion provide financial stability, while a modest beta of 0.341 suggests lower volatility than the broader market. However, the company operates in a highly competitive and rapidly evolving retail sector facing pressure from e-commerce disruption. The debt load of CNY 5.02 billion against equity requires monitoring, though current cash flows appear sufficient to service obligations. The dividend yield appears reasonable but must be evaluated in the context of the company's need to invest in digital transformation and store modernization to remain competitive.
Chongqing Department Store's competitive positioning is characterized by strong regional dominance in southwestern China but faces significant challenges from both traditional competitors and digital disruptors. The company's primary competitive advantage lies in its extensive physical footprint of approximately 300 stores across Chongqing, Sichuan, Guizhou, and Hubei, providing localized market knowledge and established customer relationships. Its multi-format approach spanning department stores, supermarkets, and appliance specialty stores creates cross-selling opportunities and diversified revenue streams. However, the company faces intense competition from national retail giants with greater scale advantages and e-commerce players transforming consumer shopping habits. The traditional department store model is particularly vulnerable to digital disruption, requiring significant investment in omnichannel capabilities. While the company's regional focus provides defensive characteristics against national competitors, it also limits growth potential beyond its core markets. The automobile trading segment provides diversification but operates in a cyclical industry with different competitive dynamics. The company's 70-year history provides brand recognition, but must be balanced against the need for modernization to appeal to younger consumers.