A leisure Chinese catering brand focusing on innovative integrated dishes. Green Tea Group Co., Ltd. is a leisure restaurant operator focusing on innovative modern Chinese cuisine, focusing on three major economic centers in East China, Guangdong Province and North China, with a rapidly expanding restaurant network by the end of 2021. The group operates a total of 236 green tea restaurants. With the business expansion, the revenue in 2018-21 was 13.1,17.4,16.0 and 2.29 billion yuan respectively, with an increase of 46.1% in 2021 compared with the same period last year. After the epidemic, the performance rebounded strongly, and the net profit became positive to 114 million yuan.
Industry: the trend of standardization and branding drives the growth, and the concentration is expected to increase. According to the company's prospectus, the market size of leisure Chinese food will be 424.6 billion yuan in 2021, and it is expected to maintain a steady growth of 14.2% of CAGR from 2021 to 2026, accounting for 18.0% of Chinese catering in 2026. Chinese food has the characteristics of diverse cuisine, chain, digitization, national tide personalization and so on. The efficiency of supply chain protects the chain of catering enterprises.
High performance-to-price ratio to attract passenger flow, optimize supply chain and reduce cost. ① high performance-price ratio: innovative integrated dishes + stylized environment + relatively low price to attract customers. The company takes innovative Chinese-style fusion dishes as the selling point, continuously innovates dishes to update menus, provides a delicate environment, and attracts a large number of customers at relatively low prices on the basis of high quality. ② mode:
Passenger flow is the key to generating income, mainly selecting shopping malls and department stores with high passenger flow, and targeting mass consumers, the overall turnaround rate in 2021 is 3.23 times per day, which is in the forefront of the industry; supply chain optimization reduces raw materials, rent, labor and other costs, opening up the possibility for the company's cost-effective route. ③ scale: high-line city model is mature, low-line replication can be expected. Restaurants are distributed all over the country and high-line cities are densely distributed, so we can further use lower pricing to enter the large and unsaturated potential market of low-line cities, and take advantage of lower rents in low-line cities to effectively reduce costs. The company plans to open 75-100 new restaurants each year from 2022 to 2024. Second-and third-tier cities are the focus of the layout, which is expected to bring more profit space for the company.
The net interest rate has more room for improvement, and the overall trend of ROE is upward. In 2018-2021, the gross profit margin basically rose steadily to 63.10%; after the epidemic was under control, the net profit margin rebounded to 4.97%. We believe that there is more room for growth in the future. The overall trend of ROE is upward and is temporarily adversely affected by the epidemic, with 29.24% in 2021. The increase compared with 2020 is mainly due to the rebound of net sales interest rate and asset turnover rate after the impact of the epidemic has been reduced. The net cash flow of operating activities remained basically stable, returning to 377 million yuan in 2021.
Risk tips: epidemic-related uncertainty risk, industry competition risk, macroeconomic change risk.