Source: Wind

Food consumption is also very popular during the Spring Festival in the Year of the Dragon. The operating conditions of listed companies in the catering industry will improve in 2023, and will they continue to pick up in 2024?

Reservations for the “Lunar New Year Dinner” in the Year of the Dragon are very popular

On the eve of the Spring Festival in the Year of the Dragon, reservations for the “New Year Dinner”, or “New Year's Eve Dinner” and “Family Feast” in some cities are very popular.

$JIUMAOJIU (09922.HK)$In an interview with reporters a few days ago, it was said that the number of reservations for brands under the Jiumaojiu Group during the Spring Festival this year has increased significantly compared to previous years. As consumers' demand for Spring Festival dinners becomes more and more diverse, brands also provide consumers with fun, fun and tasty products and services to meet the needs of different consumers. According to Jiumaojiu, the Jiumaojiu Northwest Cuisine Guangzhou branch has all been booked for the New Year's Eve dinner, while the Chongqing Hot Pot Factory has already ordered more than 1,000 tables during the Spring Festival.

$HAIDILAO (06862.HK)$The relevant person in charge of the Meal Order Customer Service Center said that since late January, demand for corporate group dinners has increased, and Haidilao stores and Haidilao delivery all over the country have received a large number of group meal orders. Since February 5, team building has come to an end, and the number of customers gathering with family and friends and eating New Year's Eve dinner has risen markedly. This year, more than 600 Haidilao stores and more than 400 delivery sites will continue to operate on New Year's Eve and the first day of the new year. Starting from the second year, Haidilao will fully resume operations across the country.

The Xibei Restaurant Group said that since the Mid-Autumn Festival last year, customers have started making reservations for Xibei's New Year's Eve dinner, and customer reservations are at their peak around New Year's Day. Some stores have basically booked all private rooms, and there is a “hard to find one room.”

The performance of listed catering companies improved in 2023

Judging from the situation in the past 2023, the operating conditions of the catering industry have improved. This is also reflected in the performance of listed catering companies.

In terms of catering companies listed on the Hong Kong stock market,$Yum China (YUMC.US)$The financial results report for the fourth quarter of 2023 was released recently. According to the above report, Yum China's performance in 2023 reached a record high, with total revenue of 11 billion US dollars, adjusted operating profit of 1.1 billion US dollars, and a net addition of 1,697 stores.

Judging from the specific financial results highlights of the fourth quarter of 2023, Yum China's system sales increased 21% over the same period of the previous year, not taking into account the impact of foreign currency conversion. This increase was mainly due to a net additional store contribution of 12%, a 4% increase in same-store sales, and a low base effect caused by the impact of temporary store closures during the previous year's pandemic. As of December 31, 2023, the total number of stores reached 14,644. The number of KFC stores reached 10,296, and the number of Pizza Hut stores reached 3,312.

In terms of A-share listed catering companies,$China Quanjude (002186.SZ)$According to the recently disclosed performance forecast, the company expects net profit attributable to shareholders of listed companies to be 56 million yuan to 66 million yuan in 2023, turning a year-on-year loss into a profit. The company lost about 278 million yuan in the same period last year.

Quanjude said that in 2023, with the recovery of passenger flow, consumption in the food and beverage market was clearly released. Combined with various favorable factors, the restaurant market ushered in a strong recovery. The company adheres to the main line of “integrity and innovation” of the time-honored brand. Focusing on the annual budget target, the company grabbed revenue and efficiency through online and offline channels, and achieved significant year-on-year growth in total revenue and profit.

Another A-share listed catering company$Tongqinglou Catering Corporation (605108.SH)$According to the disclosed performance forecast, the company expects net profit attributable to owners of the parent company in 2023 to be 273 million yuan to 320 million yuan, an increase of 191.45% to 242.13% over the previous year.

Tongqinglou said that as a scarce brand in the catering industry among listed companies in China, the company gave full play to Tongqing Lou's huge advantages in the catering and banquet business over the years, innovated and developed a new hotel business model with large catering supporting guest rooms, improving the efficiency of the use of hotel facilities and forming a superposition effect, thus making the company's hotel business extremely competitive in the market. In addition, the company used Tongqinglou as a natural advantage of a food and beverage brand to extend the industrial chain and vigorously develop the food business. It has built the competitive advantage of Tongqinglou Foods based on long-established Chinese food brands, many large offline restaurants, and many chefs' R&D capabilities. The three businesses of catering, hotel and food drive each other and promote each other, forming the company's “three-wheel drive” development strategy.

What will the industry look like in 2024?

The CITIC Construction Investment Research Report pointed out that the Spring Festival boosted demand for high-end gifts, and terminal channels ushered in a stocking stage. Sales of liquor, beer, dairy products, casual snacks, etc. are stable, and some costs have declined. The industrial chain is expected to return to the boom stage and continue to be strongly optimistic about investment opportunities in the liquor, beer, snacks, and restaurant chains.

According to an analysis by Huachuang Securities, in the short term, there was limited improvement in total catering volume in 23, but the Big B chain (big brands, big manufacturers, or big buyers in the commercial chain) grew even more impressive, driving outstanding performance in the food supply enterprise channel bound to this channel. However, from a long-term perspective, restaurant chains are still halfway. Big B enjoys chain expansion dividends, and is still a scarce racetrack with both certainty and growth. Furthermore, Big B takes a high position, focusing on deep service capabilities and depth of cooperation. The cost of customer switching is extremely high, so it is easy to form a structured local economy in a weak environment.

Catering, snacks, and fast food are better, and retail focuses on discount chains and member stores. First, in terms of the customer model, there are more opportunities for direct outsourcing, and the franchise model has higher threshold categories, such as those that are just needed but account for a small proportion (condiments), or categories that have a threshold and can provide increments (all kinds of snacks). 2. Looking at the brand stage, the service focus is on B, and while focusing on category expansion opportunities, it follows the trend and enters brands with explosive potential to break into less than 1,000 stores.

Catering industry: snacks, fast food > tea, coffee, hot pot > other meals, baking. The snack fast food (Western style is better than Chinese style) exhibition space is the largest. Tea and coffee are currently booming, and there is a strong trend of opening stores. Most of the main food categories and baked desserts have a central kitchen, and there are few supply opportunities, but you can focus on high-standard hot pot, barbecue, Western food, and customized seasonings that are relatively just needed.

edit/lambor