occurrences
On April 19, 2024, the company announced 1Q24 operating data. The average daily sales of the same stores in 1Q24 Tai'er, Hot Pot, and Jiumaojiu were -13.9%/-34.8%/-4.1% year-on-year, respectively.
reviews
The industry is under high pressure. The base was high during the same period + improved product cost performance, and the performance of its brands declined in the same store. 1Q23 The catering industry experienced the release of retaliatory demand. Later, due to changes in the external environment, same-store data pressure increased, showing the consumption characteristics of “frequency reduction and customer order reduction” in the short term.
In response to environmental changes, the company carried out multi-dimensional active adjustments in 2H23. Among them, improving cost performance is an important measure. Judging from 1Q24 data, the split price: 1) In terms of turnover rate, 1Q24 Taier/ Jiumaojiu was 3.9/3/3 times, respectively, -9.3%/-23.1%/+7.1% compared to 1H23, compared to 1H23, compared to the level ratio of 2H23 (based on simple average estimates based on annual and first half year data, Taier/ Gu Maojiu was 3.9/3.7/3 times, respectively). 2. In terms of customer unit price, 1Q24 Taier/ Hot Pot/ Jiumojiu are 73 respectively /116/57 yuan, -2.7%/-4.1%/-3.4% compared to 1H23. Among them, the unit price for 1Q24 Tai'er mainland Chinese customers was 68 yuan. The decline was mainly due to the company actively adjusting the menu structure and food prices. In addition, the increase in the share of low-tier cities also had a certain impact on customer orders.
A net of 10 stores were opened in Q1, and it is expected that the beginning of Q2 will accelerate somewhat. As of the end of 1Q24, the total number of the company's stores was 736, compared with 10 net stores at the end of 2023, including 584 Tai'er households/net opening 6 stores, 66 domestic hotpot households, 4 net stores, Jiumaojiu 75 households, a net decrease of 2, and the new brand opened 2 new stores outside of the mountain. According to the company's 23-year results announcement, Taiji plans to open 80-100 new stores in mainland China, 15-20 new stores outside mainland China, and a hot pot plan to open 35-40 new stores. Q1 may affect the speed of opening stores during the Spring Festival, and it is expected that the beginning of Q2 will accelerate.
The repurchase plan of up to HK$100 million reflects management's confidence. The company announced on the 24/4/19 resolution to exercise the board's repurchase authorization right in accordance with the 23/6/2 shareholders' meeting to repurchase shares in the open market from time to time at a maximum amount of HK$100 million. The board of directors believes that recent stock prices do not reflect the company's intrinsic value and show confidence in the company's long-term business prospects.
Profit Forecasts, Valuations, and Ratings
There is still pressure at the beta level in the short term, but the company has strong brand building and back-office capabilities, and is actively making adjustments in terms of pricing, marketing, and franchise models. The net profit of 24E~26E is expected to be 5.7/7.1/8.8 billion yuan, PE 11.0/8.8/7.1X, maintaining the “increase” rating.
Risk warning
The recovery in same-store sales fell short of expectations, franchise store showrooms fell short of expectations, etc.