Description of the event
The company released its 2024 quarterly report. 2024Q1 achieved operating income of 354 million yuan, a year-on-year increase of 10.74%; realized net profit of 39.6.238 million yuan, a year-on-year decrease of 3.43%; realized net profit deducted from non-mother of 377.04 million yuan, an increase of 87.07% year on year; and basic earnings per share was 0.16 yuan, a change of 0.00% year on year.
Incident reviews
2024Q1's revenue increased slightly compared to the same period last year. Among them, the revenue from the group meal business and revenue from the South China region grew faster compared to the same period last year. ① Looking at sales channels: 2024Q1's franchised stores, direct-run stores, and group meal businesses achieved revenue of 258, 0.06 million yuan, and 83 million yuan respectively, with changes of 8.31%, -7.97%, and 20.86% respectively over the same period last year. ② Looking at the sales area: 2024Q1 achieved revenue of 2.91, 0.30, 0.13, and 20 billion yuan respectively in East China, South China, North China, and Central China, with changes of 7.92%, 38.41%, 24.48%, and 15.35% respectively over the same period last year.
The gross margin and period expense ratio of the 2024Q1 company improved, but the net interest rate declined due to a decrease in net income due to changes in fair value. 2024Q1's gross margin was 25.92%, up 1.72 percentage points from the same period last year; the net profit margin of 2024Q1 was 11.39%, down 1.12 percentage points from the same period last year. Through analysis, it can be seen that the decline in net profit and net interest rate of 2024Q1 compared to the same period last year was mainly affected by a decrease in net income due to changes in fair value: ① 2024Q1's sales period expense ratio was 11.00%, down 3.76 percentage points from the same period last year; among them, the sales expense ratio, management expense ratio, financial expense ratio, and R&D expense ratio were 5.01%, 7.62%, -2.53%, and 0.90%, respectively, with changes of -2.27, -2.03, 0.49, and 0.04 percentage points from the same period last year, respectively. ② The net income from changes in fair value of 2024Q1 was 4,509 million yuan, a decrease of 81.73% over the same period last year.
Due to the reduction in non-recurring profit and loss, the company's net profit deducted from non-return to mother showed a rapid increase.
The non-recurring profit and loss of the 2024Q1 company was 1,919,800 yuan, and the non-recurring profit and loss of the 2023Q1 company was 208.765 million yuan, a year-on-year decrease of 90.80%. Looking at the breakdown, the biggest change in non-recurring profit and loss was the fair value change profit and loss of non-financial enterprises holding financial assets and financial liabilities, and profit and loss from disposal of financial assets and financial liabilities, in addition to effective hedging business related to the normal operation of the company. The 2024Q1 item was 1.677 million yuan, and the 2023Q1 item was 25.6568 million yuan, a year-on-year decrease of 93.46%.
Investment advice
The company is expected to achieve revenue of 1,887, 21.19, and 2.362 billion yuan respectively in 2024-2026; achieve net profit of 2.40, 2.69, and 306 million yuan, respectively, up 12.2%, 12.3%, and 13.8%; corresponding EPS is 0.96, 1.08, and 1.22 yuan respectively, calculated at a closing price of 16.06 yuan on April 25, and the corresponding PE is 16.8X, 14.9X, 13.1X, respectively, taking into account the company The store and group meal business is improving steadily, maintaining the “Accumulation - A” rating.
Risk warning
The risk of price fluctuations of raw materials such as pork and flour; the risk of increased market competition in the frozen food industry; the risk of improper management of franchisees affecting the company's operating efficiency and brand image; the risk of concentrated sales areas; the risk that the return of fund-raising projects falls short of expectations; the risk of demand recovery falling short of expectations; and risks related to food safety.