The company released three quarters of 2023 report, 23Q3 revenue / profit year-on-year-11.9% CPM 18.8%, lower than expected. On the demand side, the C-end demand for short-term prefabricated dishes fell, the diversion of agricultural trade passenger flow, the weak recovery of social catering and other effects, short-term income pressure, Q2 net opened 25 franchise stores, store opening growth slowed down month-on-month, the street store model is still in the polishing stage, B-end downstream demand recovery is not as expected. Looking forward to Q4 and next year, the follow-up of single-store efficiency is expected to improve store efficiency through CD store optimization, while B-end revenue growth is expected to accelerate through product category adjustment and channel development. On the profit side, the prices of beef and other costs are low and volatile, and the gross profit margin is expected to be maintained. Considering the increase in depreciation brought about by the climbing of new capacity and the pressure on short-term profitability, earnings are still expected to improve month-on-month next year. We expect the 23-25 EPS forecast to be 1.07,1.29,1.52 yuan, and the current stock price corresponds to 35.3 times PE in 23 years, maintaining the "overweight" rating.
Event: the company disclosed that the company's total operating income / return net profit / deducted non-net profit in the first three quarters of 2023 was RMB 1.04 million respectively, which was + 1.9% MP 2.9% and 4.8% respectively compared with the same period last year. Among them, the realized income / return net profit / deduction non-net profit of 23Q3 is RMB 0.33 billion respectively, which is-11.9% and 18.8% respectively compared with the same period last year. 23Q3 cash rebate of 215 million yuan, down 14.73% from the same period last year, slower than income growth, operating net cash flow of 82 million, + 60.24% year-on-year, mainly due to the reduction of inventory.
The recovery of Q3 demand was not as expected and the opening of stores slowed down from the previous month. Q3 company franchise store / distribution store / wholesale / direct sales channel realized revenue of 1.09, 0.54, 0.53, and 0.03 million, respectively, compared with the same period last year.-6.4%, 27.1%, 25.4, 4.8%, respectively, revenue of merchant super channel Q3 reached 9.48 million yuan, an increase of 21.49 percent over the previous month. Affected by the progress of opening stores and the decline in revenue per store, C-end revenue declined compared with the same period last year. By the end of 23Q3, the company had a total of 1798 franchise stores, of which 25 were Q3 net franchise stores, slightly slower than Q2 (40 Q2 net franchise stores), and the opening progress was slightly lower than expected. In addition, the number of Q3 dealerships / superstores increased by 10 / 9. Single Q3 wholesale customers a net increase of 23, affected by the weak recovery of downstream social catering, B-end mobile sales declined compared with the same period last year. From a regional point of view, Q3 East China is affected by the decline in revenue from single stores at the C end, and the year-on-year growth rate turns negative. Revenue in East China / North China / Central China / South China / Southwest / Northeast is-12.5%, respectively, compared with the same period last year.
Cost downward gross profit margin resumed, rates rose slightly, profitability was under pressure. Benefiting from the contribution of the decline in the cost of raw materials such as beef, 23Q3 achieved a gross profit margin of 26.25% compared with the same period last year, and the sales / management / R & D expense rate of Q3 company + 2.39pctMagi Q3 compared with the same period last year + 2.30/+2.57/+0.04pct. The rate of depreciation of the new plant increased, the market cost was lower last year, and the personnel investment increased this year. In the end, Q3 achieved a net return rate of 16.10%, a year-on-year rate of-1.36%, and a non-return net interest rate of 15.65%, a year-on-year rate of-0.95 pct.
Investment advice: release of new capacity, look forward to improved demand, maintain the "overweight" rating. Company 23 Q3 revenue / profit year-on-year-11.9% Universe 18.8% mai Q2 net opening of 25 franchise stores, the opening progress is slower than expected. On the demand side, the C-end demand for short-term prefabricated dishes falls, the diversion of agricultural trade and passenger flow, and the weak recovery of social catering affect the income pressure, and the street shop model is still in the polishing stage. Looking forward to Q4 and next year, the C side is expected to improve store efficiency through CD store optimization, while B side is expected to accelerate revenue growth through product category adjustment and channel development. On the profit side, the prices of beef and other costs are low and volatile, and the gross profit margin is expected to be maintained. Considering the increase in depreciation brought about by the climbing of new capacity and the pressure on short-term profitability, earnings are still expected to improve month-on-month next year.
We expect the 23-25 EPS forecast to be 1.07,1.29,1.52 yuan, and the current stock price corresponds to 35.3 times PE in 23 years, maintaining the "overweight" rating.
Risk tips: rising costs, lower-than-expected recovery of demand, increased competition in the industry, macroeconomic impact, etc.