Incident: The company released its 2024 quarterly report. In 24Q1, it achieved operating income of 354 million yuan, +10.74% year on year; net profit to mother of 40 million yuan, -3.43% year on year; after deducting non-net profit of 38 million yuan, +87.07% year on year.
The growth rate of group meals is picking up, and there is still a year-on-year gap in single stores. Channel sub-channel: 24Q1 franchise/direct-management/group meals achieved revenue of 2.58/0.06/083 million yuan respectively, up to +8.31%/-7.97%/+20.87%. As of the 24Q1 company's 5094 franchise stores, compared with 51 stores opened at the end of 23 (203 newly opened and 152 closed), the rate of store expansion slowed year-on-year; considering the impact of the Spring Festival holiday in the first quarter and supply-side competition, the same store is still expected to have a small gap; group meals are expected to resume a higher growth rate outside East China under the influence of the base figure. Regional development Speed up. Subregions: 24Q1 East China/ South China/ North China/ Central China achieved revenue of 2.91/0.30/0.20/ 0.13 billion yuan respectively, +7.92%/+38.41%/+15.35%/+24.48%. In terms of number of stores, the number of stores in East China/South China/North China/Central China opened 81/64/10/48, respectively, with a net opening of 3/53/5/0, respectively.
Costs have been improved, cost efficiency has been improved, and profitability has been significantly optimized. Benefiting from the decline in the cost of major raw materials such as pork, the 24Q1 company's gross margin was +1.72 pcts year over year to 25.92%. Cost-side operating efficiency optimization was obvious. The 24Q1 sales expense ratio was 5.01%, -2.27pcts; the management expense ratio was 7.62%, -2.20pcts year over year; the R&D/finance cost ratio was relatively stable, +0.04/+0.48pcts, respectively. 24Q1 achieved a deducted non-net interest rate of 10.66%, +4.35pcts year on year; considering the non-recurring profit and loss generated by indirect shareholder Peng Beverage, 24Q1 achieved a net interest rate of 11.20% to mother, -1.64pcts year on year.
With nationalization+outward mergers and acquisitions to expand stores, revenue is expected to grow steadily as single store and group meal businesses resume. Looking ahead, Tuodian's goal is to open 1,000 new stores in 24 years; East China stores continue to be encrypted, and new markets such as foreign ports in Hunan and Anhui expand in an orderly manner; the 24Q2 Steamed Food Service is expected to be consolidated (51% share acquisition). The company is mainly responsible for supply chain and store management, carefully flopping the market considering the life cycle and actual business conditions of the store; the single store increases the level of single stores and the success rate of stores by increasing takeout penetration, exploring new store formats, opening special channels, etc.; in terms of group meals, it is deeply involved in convenient chains, restaurant chains, and new pre-retail platforms. Cooking samples continue to advance, and the group meal business is expected to recover growth.
Investment advice: The company's 2024-2026 revenue is expected to be RMB 18.3/20.3/2.24 billion, respectively; net profit to mother is RMB 2.4/2.7/3.0 billion, respectively, +14.1/12.0/ 10.7%; the company's 2024-2026 EPS is expected to be 1.0/1.1/1.2 yuan, respectively, and the P/E corresponding to the current stock price is 17/15/14x, maintaining the “recommended” rating.
Risk warning: Store expansion falls short of expectations, single-store revenue recovery falls short of expectations, raw material prices fluctuate, and industry competition intensifies.