Key points of investment:
The company announced its 2023 performance forecast, which fell short of expectations. According to the company's announcement, 1) In 2023, the company achieved net profit of 120-160 million yuan, an increase of 122.01%-196.02% over the same period last year, a year-on-year increase of 122.01%-196.02%, net profit after deducting non-return to mother of 0.9-130 million yuan, and a year-on-year increase of 500.02%-782.38% for the same period last year. 2) 2023Q4's net profit to mother was -0.88 billion yuan to -0.48 billion yuan, a year-on-year loss of 130 million yuan, a year-on-year decrease of 0.4-85 billion yuan, net profit after deducting non-return to mother was -1.06 to -66 million yuan, and a loss of 144 million yuan for the same period in 2022, a year-on-year loss of 37.077 million yuan.
Promote the upgrading of online and offline operations and accelerate the development of omni-channel digital intelligence. According to the company's announcement, in 2023, the company actively optimizes, adjusts and upgrades the original business format stores, continues to upgrade the big store experience, and focuses on promoting first-store breakthroughs and the introduction of high-end products, thereby enhancing product strength, improving the consumer shopping experience, and achieving better customer flow growth. The company made efforts to explore potential internal efficiency gains, close inefficient stores, and improve profitability. Performance in the new region improved markedly. At the same time, the company continues to promote digital construction, organizational transformation and process optimization, steadily promote the transformation of the supply chain system, continuously improve operation and management efficiency, integrate online and offline development, drive healthy growth in online revenue, and continuously enhance omnichannel service capabilities.
Continue to develop the layout of new business formats and continue to improve the regional layout. According to the company announcement and the company's official website, in 2023, the company will actively develop innovative snack stores and discount stores, integrate and share internal resources to create a sustainable and effective business model and category structure. 23Q4 Jiajiayue, Haohuixing discount stores, and Yueji Good Snacks opened new stores in Shandong, Anhui, etc., and 10 Yueji snack stores were opened together on November 24. It is expected that in the future, the company will accelerate development using a combination of direct management and franchise models, forming stronger multi-business linkages within the region, and the market penetration rate and share are expected to further increase.
Maintain a “buy” rating. In '23, Jiajiayue actively promoted the improvement of the business format and layout, consolidating operational quality and supply chain advantages. Considering the uncertainty of the optimization and adjustment results of the original store in '23 and the impact of the initial period of the new business format, we lowered our profit forecast. We estimated that the company's net profit for 23-25 years was 1.42/3.03 billion yuan (original value was 2.97/3.44/ 393 million yuan). According to comparable companies, Hongqi Chain, Chongqing Department Store, Tianhong Co., Ltd., and Wangfujing PEG valuations, we gave the company 1.3 times the average PEG for 24 years. Corresponding to the target market value of 8.3 billion yuan, the current market value corresponds to a 23% increase, maintaining the “buy” rating.
Risk warning: The recovery in consumption falls short of expectations, the development of new business formats falls short of expectations, and the progress of store optimization falls short of expectations.