How likely is it that Yonghui Supermarket (60 1933) will improve its performance through depreciation years?

Question: See the blog post of Fundamental Analysis Framework-Yonghui Supermarket (60 1933) for details.

Some people say Yonghui Supermarket "

The story of its high growth is that the conventional five-year depreciation is based on 10 years, so they will report profits soon after opening the store, so you see that their profits seem to grow rapidly, which is deceptive to some extent. Analysts are not just fooling around without seeing this depreciation period. "

According to the annual report, the depreciation period of buildings, machinery and equipment is basically the same as BBK. The best judgment is that the rent should be amortized evenly according to its benefit period. As for the decoration fee, Yonghui amortizes the newly opened store (longest 10 year) and the old store (longest 5 years) respectively. The maximum amortization amount of BBK is the service life of the leased assets for decoration. I wonder if this is the same as the depreciation period of 5-6 years for the decoration of houses and buildings mentioned above? If so, the amortization period of the renovation fee for Yonghui's new store is twice that of BBK. Specific analysis

Judging from the 20 10 annual reports of the two companies, from the ratio of depreciation and amortization to operating costs, Yonghui is indeed better than BBK, but this has little to do with the self-owned property of Yonghui Supermarket, because it is reflected in the rent and will not be reflected in depreciation. If the current depreciation expenses of houses and buildings are proposed, the depreciation and amortization of the two companies account for the same proportion of operating costs, and Yonghui is slightly higher by 0.7 percentage points.

Table: Comparison of depreciation and amortization between the two companies

Yonghui is called storefront decoration and BBK is called fixed assets improvement, but both of them are included in long-term deferred expenses, and depreciation and amortization account for the highest proportion. At this point, Yonghui's depreciation life seems to be much longer than BBK's, but this may be related to the increase this year, because if it is increased in that year, it is impossible to amortize these new parts for 65,438+02 months, so the result is that the ratio of the accrual to the original value in that year will be very small, 2065,438. It is estimated that their amortization period is about 5 years.

Table: Comparison of Depreciation Years and Composition

From the above two points of view, it is unlikely that Yonghui will improve its performance by extending the depreciation and amortization period.