Main points of investment:
The increase in non-operating income led to the growth of performance.
Company 16H achieved revenue of 250 million / + 5.07% and net profit of 20.878 million + 676.76%. The substantial increase in performance was mainly due to the compensation income obtained by the company from completing the government demolition of Defa long Hotel during the reporting period; the net profit after deducting non-return to the mother was-11.276 million /-11.02% and 0.04 yuan.
There is great resistance to endogenous growth.
In terms of products, 16H catering services achieve revenue of 198 million / + 5.66%; merchandise revenue of 15.091 million /-21.30%; and room service revenue of 6.1336 million /-13.56%. The company's catering revenue has declined for three consecutive years compared with the same period last year, and goods and guest rooms have declined for four consecutive years, so it is difficult to improve the impeded endogenous growth in the short term.
The gross profit margin is basically flat, and the expense rate increases slightly.
The comprehensive gross profit margin of 16H company is 37.89%, which has been basically flat in recent years; among them, catering is 30.71% CPM 1.32 pct; merchandise business, 39.87% CPM 3.13 pct; room business, 53.52% CPM 12.12 pct. During the period of the company, the expense rate is 38.85% pct; 2.22pct; among them, the sales expense rate is 31.50% Compact 0.70 pct;, the management expense rate is 6.40%, and the financial expense rate is 0.91%. The financial expense rate is 2.22 pct, which is due to a reduction in interest income from bank deposits compared with the same period last year.
The catering industry has old trees and new flowers, and its performance is under pressure and needs to be transformed urgently.
The company is a time-honored catering enterprise in Xi'an. Affected by the downturn of the consumer market in recent years, the development space of its main business has encountered a bottleneck and does not have strong performance support in the short term. ① Nuggets mass consumer goods, cross-border operation to try to diversify development. Relying on the influence of its 11 "China time-honored Brands" famous brands and the food and beverage management team, the company comprehensively promotes small chain stores, community convenience stores and other consumer goods; ② tries the e-commerce platform and lays out the catering O2O model. During the reporting period, the company continued to improve service quality and information level through effective channels such as catering + Internet, strengthened cooperation with e-commerce platform, and achieved good results in promoting online sales through group purchase package + WeChat business distribution system; ③ accelerated capital operation and had a strong demand for extension expansion. Although the company's 15-year plan to increase its 100% equity stake in Jiahe has been suspended, it still demonstrates the company's determination to strengthen the layout of catering O2O and transform the public catering market. in the future, the expectation of further epitaxial investment mergers and acquisitions through capital operation still exists.
Coverage for the first time, giving "overweight" rating
Under the continuous pressure of the main business, on the one hand, the company is actively transforming to public catering O2O to get rid of the short-term profit predicament; on the other hand, it continues to look for extension M & An opportunities to expand sales channels, integrate resources from the bottom up, and improve the national layout. Themes such as the reform of state-owned enterprises and free trade zones will be good for the long-term growth of the company. We estimate that the EPS in 16-18 will be 0.02 yuan, 0.03 yuan and 0.04 yuan respectively, giving the "overweight" rating.
Risk hints: the consumer market is in the doldrums and competition in the catering industry is intensified.