Event
The company announces its mid-year report in 2023. 23H1, the company realized total revenue of 1.866 billion yuan (+ 3.15%) and net profit of 256 million yuan (+ 5.78%). 23Q2, the company realized total revenue of 1.65 billion yuan (+ 9.57%) and net profit of 320 million yuan (+ 16.79%).
Demand recovered moderately, and the post-Dragon Boat Festival affected the performance of Q2.
1) the growth rate of Q2 zongzi and food income is relatively fast, and the post-Dragon Boat Festival has a certain impact on the performance. 23Q2, the company's zongzi series achieved income of 1.489 billion yuan, compared with the same period last year + 11.34%, 23 years after the Dragon Boat Festival, and the revenue and profits of some zongzi products were delayed by Q3 recognition. 23Q2, the company's food series realized income of 36 million yuan (+ 8.20%), egg products, cakes and other realized income of 108 million yuan (- 8.15%).
2) optimize and adjust offline stores. In terms of catering stores, 23H1, the company's chain store channel, achieved revenue of 218 million yuan (+ 35.92%), of which Q2 realized revenue of 139 million yuan (+ 47.22%). The company adhered to the strategy of "closing, turning, shrinking" and "innovation" to achieve continuous efficiency improvement of catering stores in the first half of the year. As of 23H1, the company has opened 128 direct stores and 31 cooperative stores in the Yangtze River Delta, Wuhan and Macao. The company explores the new business type chain model around "one-stop solution to family breakfast snacks + festival companion gift giving needs". As of 23H1, 6 direct operation festival companion gift shops have been established and 7 have joined the festival companion gift shop. The company has transformed some branches into seasonal food collection stores. At present, four city branches have realized the transformation.
3) the revenue from Q2 distribution channels increased by 32%, and the income from East China accounted for more than half. From a channel-by-channel point of view, except for chain store channels, 23Q2 distributors / e-commerce / Shang Chao / other channels realized income of 7.66 Maple 4.11 RMB 2.31 / 86 million, respectively, compared with the same period last year, + 32.35% Grammer 6.05% Universe 15.44% Compal 17.50%. From a regional point of view, the income of 23Q2 in East China is 865 million yuan (+ 13.77%), that of other regions and overseas, e-commerce is 767 million yuan (+ 5.51%), and that of East China accounts for 53.01% (+ 1.88pct) of the main business income.
4) optimize the quality of channel dealers and infiltrate the blank market. The company subtracts the number of dealers, adds quality, and increases the penetration of dealers and merchants in non-East China regions. as of 23H1, the number of dealers in East China / other regions is 465 pm, a net decrease of 33 / a net increase of 19 compared with the end of 22.
Q2 gross profit margin and net profit margin increased slightly, and the expense rate was stable during the period. 1) Q2 gross profit margin and net profit margin increased slightly. 23H1, the company's gross profit margin / net profit margin is 41.49% / 13.72% respectively, compared with the same period last year-0.18/+0.29pct. 23Q2, the gross profit margin / net profit margin of the company is 42.38% and 19.45% respectively, which is + 0.45/+1.21pct respectively compared with the same period last year.
2) the expense rate remained stable during the period. 23H1, the company's sales / management / R & D / financial expense rates are 16.88%, 5.43%, 0.74%, 0.13%, respectively, compared with the same period last year-0.15/+0.88/+0.37/-0.60pct. 23Q2, the company's sales / management / R & D / financial expense rates are 12.99%, 3.54%, 0.54%, 0.10%, respectively, compared with the same period last year-0.09/+0.23/+0.30/-0.24pct.
Investment suggestion
The company is the leader of zongzi industry in China, with strong offline channel barriers, zongzi benefit from the upgrading of consumption, moon cakes, baking promising; 23H1 company moderate recovery, store optimization adjustment, channel dealers to improve efficiency. We estimate that the company's annual return net profit on 23-24-25 will be 1.91 million yuan, or an increase of 38.65%, 27.14%, 28.23%, corresponding to the PE on August 30, 22-18-14 (market value 4.3 billion yuan), maintaining the "overweight" rating.
Risk hint
Food safety risk, raw material price fluctuation risk, rubbish category less than expected risk.