China tavern chain leader, build young people's offline social platform company is China's largest offline pub chain brand, the product portfolio touts a cost-effective "slightly tipsy experience", focusing on creating a relaxed and free social atmosphere. Positioned as a "party space tailor-made for young people".
Since 2018, the company has gradually transformed from joining the direct operation mode to the expansion period. According to the company prospectus, the company plans to expand 400,630,900 stores respectively from 2021 to 2023.
"younger Brand + higher quality profit + standardized Operation" to build core competitiveness (1) Brand tonality: younger target audience, attract core users through promotion in colleges and universities, and actively carry out high-frequency and diversified preferential activities to form the official Wechat, Douyin and Weibo Corp new media matrix to cultivate private domain traffic. (2) profitability: 1 products: give priority to own brands, supplemented by third-party alcoholic drinks, create a "low price + high gross margin" product matrix, and steadily open up e-commerce channels to effectively make up for the defect of low natural turnover rate of taverns; 2 Rent: the strategy of location selection is "good location + bad location", so as to minimize the rental cost under the condition of ensuring passenger flow. 3 labor: the staff structure is highly streamlined, accounting for about 20% of revenue, at a low level of peers. (3) Operation mode: highly standardized, empowering the pub to expand strongly, which is reflected in three aspects: digital system, operation mode and supply chain system.
Analysis on the Market Space and Future Development of the Company
According to the estimation, according to the density caliber of colleges and universities and business circle, the company may open about 5700 stores for a long time, and the space for expanding stores is broad. The profit model of the company's single store is clear. according to estimates, the operating profit margins of first-tier cities are-6%, 3% and 7% respectively from 2021 to 2023, 17%, 19% and 20% respectively in second-tier cities, and 23%, 25% and 26% in third-tier cities and below.
Investment advice and profit Forecast
We are optimistic that the company will build its core competitiveness through "young brand + high-quality profit + standardized operation". With the increase in the number of stores, the maturity of the single-store model and the appearance of economies of scale, it is expected to gradually contribute to profits and achieve high performance growth. We predict that the operating income of the company from 2021 to 2023 is 21.91,48.73 and 8.917 billion yuan, the net profit is 1.63,5.41 and 1.103 billion yuan, the EPS is 0.13,0.43,0.87 yuan per share, and the corresponding PE is 106,32,16 times. We give the company a target market value of 25 million yuan for 2022, with an estimated 1353 stores in 2022, with a total market capitalization of 33.8 billion yuan and a corresponding target price of 26.70 yuan. Cover for the first time, giving a "buy" rating.
Risk hint
Store expansion is less than expected risk, pub industry competition risk, raw material price fluctuation risk, food safety problem risk.