Event
The company released its semi-annual report for 2021, with an operating income of 868 million yuan, an increase of 303.65% over the same period last year, and a net profit of-24.836 million yuan, compared with-18.526 million yuan in the same period last year, and an adjusted net profit of 80.631 million yuan in the same period last year, compared with-18.526 million yuan in the same period last year.
Brief comment
The adjusted net profit increases rapidly, and the overall financial performance is better.
In the first half of 2021, the company achieved an adjusted net profit of 80.631 million yuan, turning losses into profits and substantial growth, mainly due to the larger amount of listing expenses and equity-settled share payments, and the overall profitability was better reflected after being added back. 2021H1 gross profit margin reached 68.71%, year-on-year + 3.06pct, on the basis of self-owned products and supply chain control gradually improved, raw material costs further reduced. The net operating cash flow of 2021H1 was 106 million yuan, an increase of 126.83% over the same period last year, and cash and cash equivalents at the end of the period were 26.229 million yuan, an increase of 64.25% over the same period last year. The asset-liability ratio of 2021H1 is 84.37%, an increase of 3.00pct over the same period last year. This is mainly due to the fact that the financial liabilities measured at fair value and included in the profits and losses of the current period amount to 202 million yuan, which has no significant impact on cash flow.
The high-speed development of the store continues to sink, and the operation efficiency of the single store is high.
By the end of 2021H1, the company had 471 taverns, and by September 24, 2021, the pub network had further increased to 584, covering 24 provincial districts and 104 cities. It is expected that the number of new stores will exceed 400 in 2021, and the bargaining power of the selected properties will continue to improve. It is expected that the opening of stores will continue to accelerate and sink rapidly in the next few years. As of September 24, 2021, taverns accounted for 12.7% of the company's first-tier cities (compared with 2020H1 momentum 2.4pct), second-tier cities accounted for 56.3% (+ 0.8pct), and third-tier and lower accounted for 30.8% (+ 1.8pct). The sinking trend was consistent with its own positioning. The average daily sales per store is significantly higher than the low base of 2020H1. The average daily sales in first-tier cities is about 9900 yuan, which is + 65.0% compared with the same period last year, 12200 yuan in second-tier cities, + 34.1% year-on-year, 12300 yuan in third-tier and below cities, + 35.2% year-on-year, overall 11900 yuan, and + 36.8% year-on-year. The average daily sales of the same store is + 40.2% compared with the same period last year, which is better than the same period last year. In terms of cost structure, employee welfare and human service expenditure accounted for 35.8% of revenue, year-on-year + 6.6pct, mainly due to higher salary, third-party labor outsourcing expenses, and increased equity-settled share payments. Depreciation of right-to-use assets accounted for 9.4%, down 10.1pct from the same period last year. On the whole, the operating efficiency of the single store continues to be of high quality.
The product structure has been continuously optimized, and the proportion of revenue from 2021H1's own products has reached 78.5%, which has greatly increased 10.2pct compared with the same period last year. Among them, the proportion of beverage drinks has increased significantly, reaching 47.1%, and the proportion of beer that has increased by 23.7% compared with the same period last year has declined. Third-party brands accounted for 18.4% of alcoholic beverages, down 9.4pct from the same period last year. The promotion of self-owned products and beverage beverages is in line with the characteristics of positioning the main customer group, which is conducive to the subsequent continuous acceleration of store opening and sinking.
Continuous standardization and high-quality single store support rapid opening, clear positioning and subdivision of the track will help the growth company officially list on the Hong Kong Stock Exchange in September 2021, IPO fund-raising will further support the expansion plan in recent years, according to the company's plan, the number of taverns may reach about 2200 by the end of 2023. We believe that the company's standardized expansion and clear positioning make it temporarily without the same competitors in the tavern subdivision track, and the scale advantage and brand effect of the subdivision track are prominent. under the verified circumstances, the bargaining power of the brand in the main layout scene will be further enhanced, the sinking store opening potential can be further enhanced, and the excellent single-store operation efficiency will provide some support for the rapid opening of the store. At the same time, the degree of standardization of the company's stores continues to improve, self-owned products enhance the control of the supply chain, products are standardized and gradually close to the customer base, standardized products basically do not need to be processed too much at the store end, decoration styles and materials will also continue to be standardized. It is expected that the opening and operation of stores will be smooth in the past two years, and the number of stores will gradually increase, which will continue to improve and maintain the operational capacity and brand effect.
Investment suggestion: the company is expected to achieve adjusted net profit of 148 million yuan, 499 million yuan and 853 million yuan from 2021 to 2023, and the current stock price is rated as "overweight" corresponding to PE of 169X, 50X and 29X respectively.
Risk tips: the speed of opening stores is not as fast as expected; the operational efficiency of individual stores may decline due to a variety of factors; the operation of stores in high-line cities is not as expected; the possible lasting impact of the epidemic.