On October 29, 2023, Huang Shanghuang issued the results announcement of the third quarterly report of 2023.
Main points of investment
Cost improvement, proper rate control, increased profitability
2023Q1-Q3 's revenue was 1.581 billion yuan (same as a decrease of 2.3%), and its net profit was 101 million yuan (up 19.4%). Of this total, 2023Q3's revenue was 434 million yuan (same as a decrease of 0. 5%).
The net profit of return to the mother was 18 million yuan (up 300.5%). Gross profit margin 2023Q1-Q3 is 28.7% (same as minus 0.3pct), of which 2023Q3 is 31.3% (same as increasing 3.9pcts). The net profit rate 2023Q1-Q3 is 6.21% (with the same increase of 1.2pcts), of which the 2023Q3 is 3.95% (with the same increase of 4.8pcts). The year-on-year increase in profitability is mainly due to the increase in gross profit margin driven by cost improvement and the effective rate control. Sales rates and management fees decreased in the third quarter compared with the same period last year, with the same decrease in 1.9pcts and the same increase in 1.0pct. The net cash flow of operating activities 2023Q1-Q3 is 208 million yuan (same as minus 46%).
The strategy of thousands of cities and ten thousand stores is advancing steadily, and there is still plenty of room to expand stores.
The company's strategy of thousands of cities and ten thousand stores is advancing steadily, and it plans to break through the goal of ten thousand stores in 3-4 years according to the rhythm of adding 2000 stores every year. By the end of 2023H1, the company had 4213 stores, adding 404 stores in the third quarter, and is expected to have more than 4600 stores in the first three quarters. At present, the sinking market in the province and the market outside the province still have a lot of room to expand stores, and the goal of breaking through Wandian in the future has strong certainty.
Profit forecast
We are optimistic that the prices of raw materials dominated by duck pairs and duck neck products may continue to improve, and there is still room for month-on-month improvement in gross profit margin in the fourth quarter, further releasing performance flexibility. It is estimated that the EPS from 2023 to 2025 will be 0.20, 0.27, 0.34 yuan, respectively, and the current stock price will be 2023 times higher than that of 54-41-32, which will be covered for the first time and given a "buy" investment rating.
Risk hint
Macroeconomic downside risks, epidemic drag on consumption, lower-than-expected cost reduction, less-than-expected expansion outside the province, etc.