Main points of investment:
On the evening of March 26, the company disclosed its annual report: the company achieved 1.861 billion yuan in operating income for the whole year, an increase of 0.72% over the same period last year. Due to the increase in revenue, the company's revenue growth was relatively low, and the return net profit was 136 million yuan, down 2.57% from the same period last year. Slightly lower than the performance of KuaiBao (143 million yuan), deducting non-net profit of 119 million yuan, down 5.68% from the same period last year. Mainly due to the company's impairment of intangible assets and goodwill formed by acquisitions (Xinjiang Quanjude and Wuxi Jinjuyuan), resulting in a total asset impairment loss of 24.98 million yuan. At the same time, the company strengthened marketing measures to increase the sales expense rate by 1.65pct to 38.02%, in which sales labor costs and business promotion fees increased significantly; due to the increase in the amount of Internet online payment and the lower formalities rate, the amount of handling fee decreased, and the company's financial expense rate decreased by 0.3pct to 0.03%.
Gross profit margins of all businesses have risen, and demand has stabilized in the direction of public catering. In 2017, the company received 8.0407 million guests, up 4.35% from the same period last year; per capita consumption fell 3.97% from the same period last year; and attendance dropped 2.21% from the same period last year. Gross profit margins in the company's catering and commodity sales sectors increased by 1.4/0.4pct to 69.7% and 35.9% respectively. The company is divided into two key regions: Beijing, Tianjin, Hebei and the Yangtze River Delta (Yangtze River Economic Belt). Beijing is the core base of the company, and its revenue has been relatively stable. On this basis, the gross profit margin increased by 0.8pct in 2017. Revenue growth is positive in both Shanghai and Nanjing. Last year, the company opened seven new stores, including Quanjude Yizhuang store in Beijing, Shaoxing store, Zhenjiang store and Shanghai Huanjiang Road store. In recent years, the company strives to develop to the public catering, at the same time, it has strict requirements on service and quality, which can better meet the needs of consumption upgrading.
Establish brand chain and serialization strategy, and introduce third-party evaluation to optimize assessment. In addition to Quanjude Roast Duck Restaurant, the company also has Fangdian Restaurant, Fengze Garden Hotel and Sichuan Hotel. The company's strategy changes from "one brand goes all over the world" to "multi-brand flowering", and carries on the chain development around the brand. In 2017, around the theme of "Green, Nutrition and Health", the research and development of innovative dishes in "Spring and Summer" and "Autumn and Winter" were completed, and a total of 92 new products were launched. At the same time, the company introduces the third-party evaluation data for the first time, regards customer satisfaction as the job goal, optimizes the content of performance appraisal, and the work efficiency will be gradually improved.
Investment advice and profit forecast: the fund-raising project has not made any further progress due to the nature of land and property rights. The company is actively looking for new investment projects to raise funds for this part. As a time-honored brand of Chinese catering, the company will subdivide the brand of the stock enterprises from this year, and the time-honored brand will gradually coruscate new vitality. Slightly downgrade the profit forecast of 18max for 19 years and add it to 2020. It is estimated that the EPS for 2018-2020 will be 0.50Unix 0.54 EPS (the original forecast for 18-19 is 0.55 Universe 0.60 yuan), corresponding to the PE of 30-28-26 times, maintaining the "overweight" rating.
Risk tips: food safety risks; operational risks during the cultivation period of newly opened direct stores, etc.