Events:
The company's revenue in the first three quarters of 2023 was 1.581 billion yuan,-2.29% compared with the same period last year. The net profit returned to the mother was 101 million yuan, an increase of 19.40%, and the non-return net profit was 87 million yuan, an increase of 24.43%. Of this total, the revenue in the third quarter of 2023 was 434 million yuan,-0.43% compared with the same period last year, and the net profit returned to the mother was 18 million yuan, an increase of 300.49%. After deducting the non-return net profit of 16 million yuan, the net profit increased by 2159.18%.
The progress of expanding stores is steady, and the online sales of empowering stores
The company has made steady progress in expanding stores, opening 404 new stores in the third quarter, 1004 stores in the first three quarters, and 1500-1600 Xintuo for the whole year. In terms of individual store revenue, the company adopted the method of small profits and quick turnover to increase consumption frequency and guide stores to increase the proportion of table products sales. the overall performance of old stores increased by 3.3% from January to July. This year, the company has adopted the "1x N" model to increase the enabling stores of its new retail business, increase takeout sales and Douyin traffic, and achieve more than 30 per cent of online sales.
Gross profit margin increased month-on-month, net profit margin improved year-on-year
The price of raw materials continued to fall, and the company achieved a sales gross profit margin of 28.7% in the first three quarters, compared with the same period last year-0.26pct and + 0.98pct in the first half of 2023. In the first three quarters, the company's sales expense rate, management expense rate, R & D expense rate and financial expense rate were 12.23%, 7.19%, 2.68%, 0.38%, respectively, and the net sales interest rate was 6.21%, which was + 1.17pct compared with the same period last year.
Promote the development of its brands and accelerate the implementation of national expansion
The company promotes the development of its brands such as Zhenzhen Laolao and Dujiao Opera, creates "True Old Laos + Huang Shanghuang Fusion Store" to realize the integration of products and brands, and is committed to building regional brands based on Jiangsu, Zhejiang and Shanghai. Dujiao Opera has set up stores in Nanchang, Jiangxi and Shenzhen, Guangdong Province to build the brand of "network celebrity". At present, it has opened more than 30 stores. Looking to the future, the company will speed up the implementation of the development strategy of "thousands of cities and ten thousand stores", focus on the core areas while promoting national expansion, and achieve the goal of reaching tens of thousands of stores, excluding tax revenue of 4 billion by 2026, with an annual compound growth rate of 16.2%.
Earnings forecast, valuation and rating
In view of the fact that the recovery of the chain industry is still constrained by the economic environment, and the pace of revenue repair is slightly slower than expected, we adjust our profit forecast. It is estimated that the company's operating income for 2023-2025 will be 19.562.315pm 2.731 billion yuan (the previous value is 20.572.430pm 2.836 billion), and the year-on-year growth rate is 0.11% 18.38% 17.97% respectively. The net profit from homing is RMB 1.95 trillion (RMB 1.33), and the year-on-year growth rate is 232.58%, 89.84%, 26.86%, 0.18 and 0.35, respectively, and the 3-year CAGR is 100.08%.
Risk tips: lower-than-expected growth of stores and individual stores; fluctuations in raw material costs; food safety issues