occurrences
On March 21, 2023, Jiumaojiu issued a performance announcement, achieving revenue of 4.01 billion yuan/ -4.2% in 2022, net profit of 58 million yuan/ -85.5%, and adjusted net profit of 69 million yuan/ -81.8%.
reviews
The annual performance was in line with expectations. The pressure encouraged positive growth in the same hot pot restaurant, and Taiji maintained a high level of operating efficiency. On the revenue side, the revenue of 2H22 split separately was 2.11 billion yuan/ -2.4%, mainly affected by another increase in the impact of the national epidemic that began in September; in '22, sales at the Taier/ Jiumaojiu/ Hot Pot same-hot pot store were -22.3%/-11.0%/+6.4%, with a turnaround rate of 2.6/1.6/2.5 times (corresponding to a turnaround of 3.5/2.4/3.6) compared to 1H22, respectively. In addition to the decline in customer flow, the customer unit prices of Taiji and Jiumaojiu SSSG declined by 2 and 4, respectively. Source (main cause (After optimizing the supply chain, actively cutting prices to benefit consumers), through data from two same-store companies, Yibong Hot Pot estimates that the sales volume of a single mature store in '22 could reach 20 million+. In terms of profitability, the operating profit margin at the Taier/ Jiumaojiu restaurant level in '22 was 14.3%/12.9%, compared to 1H22 -2.2%/+1.2% respectively. According to estimates, Taiji's break-even rate was estimated to be about 1.9 to 2 times to maintain high efficiency; the company's overall raw material/employee/rent-related expenses accounted for 36.1%/28.3%/12.1%, -0.7/+3.0/+1.6pct, respectively. The net interest rate of return to mother was 1.2% /-6.9pct. The decline in profitability was mainly due to damage to the same store due to severe operating losses due to damage to the same store Face The impact is expanding.
Stores are actively expanding, and we continue to be optimistic that the growth of new brands will accelerate. By the end of '22, the company had 556 stores, a net increase of 86. Among them, Taier/ Jiumaojiu/ Hot Pot had 450/76/27 stores respectively, a net increase of 100/-7/18, accounting for 77.6%/15.1%/6.5% of revenue, of which was +4.4pct. It is expected that Taiji will maintain the rate of opening around 100 stores each year, while exploring overseas stores at an accelerated pace in 23; the new brand, Hot Pot, has already accumulated high brand potential in first-tier cities and some new first-tier cities, UE was further refined in 21 and 22, and labor costs are expected to be reduced quickly after speeding up the opening of the store. The new factory in Chongqing provides supply chain support, and the profitability of the store may usher in an upward inflection point after climbing the slope. Currently, Lai Mei Grilled Fish is planning to open 25 new stores in 23; in addition, Lai Mei Grilled Fish is in line with the company's “young culture+extreme standardized UE” brand building and improvement after the industry environment has improved after opening. You can look forward to it.
Profit Forecasts, Valuations, and Ratings
The company has outstanding brand building+efficient operation+supply chain+organizational management capabilities. The short-term main brand Taiji has strong restoration capabilities. It is estimated that 23E-25E will generate 73.6/102.4/137.1 billion yuan, net profit of 7.1/11.2/1.70 billion yuan, and EPS is 0.49/0.77/1.17 yuan respectively, corresponding to 23-25E PE 31.9/20.2/13.3X, maintaining the “buy” rating.
Risk warning
The recovery of Taiji Tongten fell short of expectations, and the pace of cultivating and growing new brands fell short of expectations.