The company announced the third quarterly report of 18 years: in the first three quarters of 18 years, the company realized operating income of 1.362 billion yuan /-1.49% and net profit of 129 million yuan /-3.81%. The company expects the 18-year performance range to be 11559.66 million yuan /-15% Murray 15639.54 + 15% 10,000 yuan.

Core viewpoints

Q3 single-quarter revenue has declined, resulting in three-quarter revenue fluctuations: 18Q3 single-quarter revenue of 487 million yuan /-6.33%, a decline, resulting in a slight decline in third-quarter revenue. In the first half of the year, the company's revenue in Beijing is 897 million yuan / + 0.24%. Compared with the strong growth of + 14.8% in East China, the old store is under some pressure. it is expected that the fluctuation in revenue in the three quarters is also related to the pressure of the old store's operation. The good performance of the company's new store in East China reflects the potential of the store after upgrading, and we expect the transformation of the old store to be put on the agenda next year, which is expected to ease the pressure.

Gross profit margin remains at an all-time high, and the rate of management expenses has dropped significantly. The company's overall gross profit margin reached 62.3%/-0.7pct in the first three quarters of 18, second only to 63.0% in 17 years since 2009, so the company's gross margin remains at an all-time high. In terms of expense rate, the sales expense rate reached 38.0%/+1.4pct in the first three quarters, which is expected to be due to increased marketing investment in the expansion of stores outside Beijing. The rate of management expenses is 11.9%/-1.4pct, which decreases significantly, and the effect of cost control is good. Financial expense rate-0.03%/-0.13pct, mainly due to the increase in online payments on the Internet, lower formalities rates resulting in a reduction in the amount of handling fees, and an increase in interest income from own funds.

The company starts the process of expanding new stores again, and the follow-up changes are still worth looking forward to. Under the influence of eight regulations in previous years, the company has not opened any new direct stores in recent years. In the second half of 17 years, the company seized the opportunity of food and beverage recovery in first-tier cities and actively sought the layout of Beijing, Tianjin, Hebei and the Yangtze River Delta. In 17 and the first half of 18, the company added 7 / 2 direct stores (2 in Beijing and 4 in the Yangtze River Delta). As the new stores opened in 17 years are mainly concentrated in Q4, it is still in the climbing period of operation, and the current revenue contribution may be relatively limited. However, as new stores mature, the momentum for revenue growth will be further strengthened. The company has abundant cash flow. After the termination of the previous acquisition of Tangcheng Chef, the company will continue to actively seek extension, and the follow-up changes are still worth looking forward to.

Financial forecasts and investment suggestions

Maintain the overweight rating with a target price of 18.40 yuan. Due to the pressure on the operation of the old Q3 store, the revenue growth rate and gross profit margin fell slightly in the third quarter, and we slightly reduced the company's revenue growth rate. It is estimated that the eps for 18-20 years will be 0.46 eps 0.51 PE (formerly 0.49 shock 0.55 shock 0.62 yuan), with an average of 40 times Rmb18.40 corresponding to the target price in 8 years (excluding 15 years), maintaining the "overweight" rating.

Risk hint

Food safety problems, rising cost pressure, lower than expected extension, etc.