1. The Hunan and Hubei situation released the 2013 annual report.
two。 Our analysis and judgment
(1) the main business situation in 2013
In 2013, annual income decreased by 41%, sales expenses decreased slightly, management expenses increased slightly, and non-operating expenses also increased significantly. In 2013, the company realized operating income of 802 million yuan (yoy-41.19%), total profit of-564 million yuan (yoy-566.21%), attributable net profit of-564 million yuan (yoy-788.86%) and basic earnings per share of-0.71 yuan. Gross profit margin decreased 11.69PCT, three expenses rate reached 73%, a substantial increase in 29PCT, income tax rate slightly reduced-0.94PCT, net interest rate of-70PCT. Gross margin 56.86% (yoy-11.69PCT), net margin-70.36% (yoy-76.37PCT). The sales expense rate is 73.02% (yoy+28.87PCT), the management expense rate is 17.98% (yoy+8.05PCT), and the income tax rate is-0.94% (yoy-33.71PCT). In the fourth quarter, single-quarter revenue hit a record low, and gross profit margin rebounded to 64% month-on-month after the third-quarter low. Throughout the year, the sales expense rate was compressed quarter by quarter, and in the case of the largest decline in revenue in a single quarter, the year-on-year change in sales expenses was only less than 5%, but there was no significant change in the management expense rate. In the fourth quarter alone, the company achieved operating income of 162 million yuan (yoy-50.63%), total profit of-262 million yuan, attributable net profit of-261 million yuan, and basic earnings per share of-0.33 yuan. Fourth quarter gross margin 63.69% (yoy-3.97PCT), net profit 21.29% (yoy+11.85PCT); income tax rate-0.91% (yoy+42.30PCT).
(2) the main catering industry is still facing the challenge of seeking popularization and adjustment.
After the reform of the shareholding system of Hunan and Hubei, it has been located in the middle and high-end restaurant business, combining the characteristics of "Hunan, Hubei and Guangdong" cuisine to absorb the essence of other cuisines to form characteristic cuisine and core competitiveness. The middle and high-end brand image brings considerable challenges to the company in the process of transformation.
From 2013 to 2014, the company's main catering business is still undergoing continuous adjustment, which we think can be mainly divided into three aspects: 1) Restaurant business: adjusting business policies to significantly reduce the consumption level of restaurants, while closing some stores with heavy losses and no hope of reversing losses. 2) Fast food group food business continues to strengthen: at present, the company has obtained the qualification of high-speed rail and civil aviation food service, and has signed contracts with a number of related enterprises, and will gradually carry out food service in the future. 3) the fast consumer food business still needs to be developed: the company has developed and launched "Hunan and Hubei feelings" fast consumer food, such as "minced pepper" pickles, "soft packaging" dishes (braised pork, Yu-Shiang Shredded Pork, powder lotus root soup, etc.) and other ready-to-eat dishes are also planned to be put on the market in 2014, community convenience stores will become the main expansion channel.
(3) the shareholding industry is expected to make a preliminary contribution to the income
In 2013, the company began to invest and operate in the environmental protection industry and achieved preliminary results. In December 2013, the company and Hefei Tianyan Green Energy Development Co., Ltd. jointly invested in the establishment of Hefei Tianyan Biological Technology Co., Ltd., the company holds a 51% stake in Hefei Tianyan, mainly engaged in the production and manufacturing of biomass energy equipment, has more than 20 patented technologies, among which the related technology has won the second prize of national science and technology progress, and the technical strength is more advanced in the industry. In February 2014, the company acquired the remaining 49% stake in Hefei Tianyan, thus owning 100% of Hefei Tianyan. In addition, the company also indirectly controls Jiangsu Shengyi Environmental Protection Co., Ltd. by acquiring a 51% stake in Kenfident Echo Holdings Co., Ltd.
(4) there is an additional gain in one-time income and holding profit in 1Q14
The company expects the net profit attributable to the first quarter of 2014 to change in the range of 6000-70 million yuan (a loss of 68.4009 million yuan in the same period last year). The reasons are: 1) the related expenses of the catering subsidiary and the parent company are expected to lose about 40 million during the 1Q14 period; 2) the planned sale of some real estate and equity stakes in the company is expected to form a net profit of no more than 30 million; 3) Hefei Tianyan, a wholly-owned subsidiary, is expected to bring a net profit of 5000-7000 yuan according to existing orders; 4) 51% holding subsidiary Confident Echo Holdings Limited wholly-owned grandson company Jiangsu Shengyi expects to bring a net profit of 10 million yuan.
3. Investment suggestion
Give 2013 / 2014 EPS-0.71/0.05 yuan.
We believe that the transformation process of the popularization of catering projects still needs to face challenges, and there is still great uncertainty in the confirmation of the profits of environmental protection projects. however, considering the one-time sale income of real estate in 2014 and the development of environmental protection projects of holding subsidiaries, 2014 is likely to reflect a reversal of net profit, while the gradual transformation of the main catering industry is expected to reduce losses in 2015, so it is given a "cautious recommendation" rating.