Event: Nai Xue's Tea released 1H23 results on August 29. Revenue was 2.59 billion yuan, up 26.8% from the same period last year.
The gross profit margin was 68.2%, down 0.1 pct from the same period last year; the adjusted net profit was 70 million yuan, and the net interest rate was 2.7%.
Comments: Nai Xue price for quantity, high-line continuous encryption. The revenue of the Naixue brand was 2.35 billion yuan, an increase of 25.3% over the same period last year. ① single store: daily sales are about 12000 yuan, down 7.3% from the same period last year. Of this total, the passenger unit price was 32.4 yuan, down 11.7% from the same period last year, and the average daily unit volume was 363, an increase of 5.0% over the same period last year. In the future, the company will maintain relatively low product prices on the basis of stabilizing gross profit margin, in order to lower the consumption threshold and expand the coverage of the population. ② stores: the number of Naxue stores is 1194, a net increase of 126 over the end of 22, and a year-on-year increase of 32.1%.
The number of first-class / second-class stores is 9750.219, which is 47 more than that at the end of 22. The number of first-line / new-first-line / second-line / other city stores is 4140.410 and 248, respectively, which is more than that at the end of 22. The company expects to add 500-600 direct stores in the next 2-3 years, with the existing high-line market encryption as the main direction. ③ same-store: daily same-store sales in 6 major cities are 15000 yuan, up 3% from the same period last year. ④ members: the number of registered members is about 66.4 million, an increase of 35.5% over the same period last year, mainly due to the continuous launch of new products and joint brands. There are about 4.3 million monthly active members, and the monthly repurchase rate is about 23.0%.
RTD business is developing rapidly, exploring the operation mode of light assets. ① RTD bottled drinks: revenue of 160 million yuan, an increase of 83.8% over the same period last year, and the proportion of revenue increased by 1.8pct to 6%. In the future, large-scale promotion will be carried out with large-scale product strategy and cooperation with Shang Chao, and it is expected to break even in the second half of the year. ② joined: on July 20, the Naixue brand opened a business partnership, mainly in low-line cities where direct stores rarely touch to increase market share. The first partnership stores are expected to be launched in the second half of the year.
The effect of reducing cost and increasing efficiency is obvious, and the guidelines for the improvement of single-store UE are basically realized. ① company report: despite the decline in cup unit price, the company's comprehensive gross profit margin is relatively stable due to the fact that it is more suitable for the popular product setting and the scale effect of the supply chain. 1H gross profit margin is 68.2%, down 0.1pct from the same period last year; operating costs benefit from effective cost reduction measures. 1H employee cost rate is 26.4%, 8.4pct is lower than the same period last year, depreciation expense rate of right to use assets is 7.7%, 3.1pct is lower than the same period last year, distribution expense rate is 7.4%, 0.6pct is lower than the same period last year.
The adjusted net profit is 70 million yuan; the adjusted net interest rate is 2.7%, reversing losses over the same period last year. ② store UE: gross profit margin 70.4%, year-on-year increase 0.6pct, labor expense rate 19.6%, year-on-year decrease 6.4pct, rent fee rate 14.4%, year-on-year drop of 1.6 pct; takeout expense rate 8.0%, down 0.5pct, store OPM 20.1%, year-on-year growth 9.7pct. Compared with the guidelines at the end of 22, the gross profit margin is slightly higher, the improvement in labour and rent is slightly lower, and other items are basically in line with. With the gradual encryption of stores and the increase in the proportion of second-tier stores, we believe that there is still room for improvement in OPM in the future.
Valuation forecast: we expect revenue of 60.9,85.1 and 10.9 billion yuan respectively from 23 to 25, an increase of 41.9%, 39.9% and 28.0% respectively over the same period last year. The adjusted net profit is 1.6,4.3 and 790 million yuan respectively, and the adjusted net interest rate is 2.7%, 5.1% and 7.3% respectively, corresponding to 0.10,0.25 and 0.46 yuan per share respectively for the adjusted EPS. At 20-25 times PE in 2024, the reasonable market capitalization range is HK $96-12 billion, corresponding to a reasonable value range of HK $5.6-HK $7.0per share (at HK $1 = RMB0.90), giving a "better than the market" rating for the first time.
Risk tips: consumption recovery is not as expected, industry competition is intensified, store expansion is not as expected.