Introduction to this report:
The 24Q1 performance was in line with expectations. Revenue growth was driven by growth in other businesses such as bacon, prepared dishes, and catering. The decline in the structural share of mooncakes led to a slightly lower profit growth rate than revenue growth.
Key points of investment:
The investment proposal takes into account the impact of weak overall demand in the restaurant industry, maintaining the 2024-2026 EPS forecast of 1.13/1.32/1.55, maintaining the 2024 target price of 22.6 yuan, and maintaining an increase in holdings rating.
Performance summary: In 24Q1, the company achieved revenue of 1,012 million yuan/ +10%, gross profit of 302 million yuan/ +1.3%, tax and additional/ sales/management/ R&D/financial expense ratios of 0.6/9.8/8.4/1.8/ -0.7%, respectively, year-on-year, -2.58/+0.36/-0.7/+0.08/-1.27pct, net profit to mother of 71 million yuan/ +2.2%, profit margin of 7%/-0.54 pct, net profit of 7%/-0.54 pct, net profit of 7/ -0.54 pct, net profit of 7/ -0.54 pct, net profit of 7/ -0.54 pct 1.1%, profit margin 6.6% /-0.58pct.
The revenue side was in line with expectations. The food manufacturing business achieved 600 million yuan/ +5%, including mooncakes 209 million yuan/ -20%, frozen 295 million yuan/ -4%, other 299 million yuan/ +18%, catering business 384 million yuan/ +13%, other business 25 million yuan/ +185%; direct sales of 190 million yuan/ +8.95% in food manufacturing, distribution and consignment sales of 410 million yuan/ +9.01%; revenue within Guangdong Province of 454 million yuan/ +6.62%, domestic and overseas, 137 million yuan/ +13.69% overseas/ +70.54%; Looking at the share of dealers, Guangdong Province accounts for 75%, domestic and overseas 23%, and overseas 2%; the profit side is in line with expectations. Revenue growth was driven by growth in other food businesses such as cured meats and prepared dishes. However, considering the decline in the share of high-margin mooncake business (1.23% to 0.89%), the increase in the share of direct-run catering businesses (35.76% to 37.91%) led to a 2.58 pct drop in gross margin, resulting in a 2.58 pct drop in profit growth rate lower than revenue growth.
Risk warning: Post-epidemic recovery progress falls short of expectations, food safety issues, and poor demand.