Introduction to this report:
The company's dividend rate reached 90% for the first time, corresponding to a dividend rate of about 4.7% in 2023. Under pressure from mid-term optional consumer valuations, catering companies gradually switched to more stable return varieties to enhance the attractiveness of the basic allocation.
Summary:
Investment advice: Considering the gradual recovery in the turnover rate and significant results in cost reduction and efficiency, maintain the company's 2024-2025 net profit forecast of 525.8 billion yuan, adding an additional 2026 forecast of 6.4 billion yuan, corresponding EPS of 0.93/1.03/1.1 yuan, maintaining the target price of 18.54 yuan, or about HK$20.43, maintaining an increase in holdings rating.
Performance summary: In 2023, the company achieved revenue of 41.45 billion yuan/ +34%, net profit of 4.5 billion yuan/ +175%, net return interest rate of 10.9% /+5.6pct, net return margin after net exchange earnings was 10.6% /+5.7pct, of which 2023H2 achieved revenue of 22.6 billion yuan/ +42%, net profit due to mother 2.24 billion yuan/ +43%, net profit to mother of 2.24 billion yuan/ +43% after excluding exchange earnings, compared to 20230.5-H1 pct, look at it as a whole More stable.
Volume is significantly superior to price, and direct-run stores are more cautious. ① Better volume than price is reflected in the year-on-month increase in the company's turnover rate in Tier 1 to Tier 3 and Tier 3 and below/mainland/overseas/overall turnover achieved +12/11/13/15/2/ 15% month-on-month growth, while the customer unit price corresponded to a decrease of -4/-3/-4/-1/ -4% month-on-month, and the trend of cost performance ratio continued; ② In 2023, the company had 3 net stores, and the first-tier/second-tier, third-tier and below/mainland/overseas/overall net store opening was -4/0/2/0/0/0/overall 2/1/3, compared to 23H1's -5/ The performance of 21/34/50/0/50 was further narrowed, and open source savings continued to be implemented; ③ The cost side improved significantly as the expansion of stores slowed down. The raw materials/employee remuneration/property rent/depreciation/amortization/utility expenses rates were 41.7/32.2/0.7/6.4/ 3.4%, +1/1.7/-0.3/-1.6/0.2pct, respectively. Among them, the increase in employee costs or the impact of first-line team incentives was gradually digested.
Joining rather than switching was introduced, and the dividend rate was raised to 90%. Zhou Zhaocheng, vice chairman of the board of directors of Haidilao, proposed in response to the opening of the franchise that the franchise is extremely restrained; the speed and scale of liberalization will be extremely cautious, and the share of franchisees will be extremely small; the company will distribute about 4.05 billion yuan in dividends, corresponding to a dividend rate of about 4.7% in 23 years. Under pressure from mid-term alternative consumer valuations, catering companies are shifting to more stable returns and more attractive infrastructure.
Risk warning: Increased market competition, significant decline in same stores, food safety risks, etc.