Recently, we have been tracking the business situation of Super Savory Foods. The key points are as follows:

Single store revenue needs to be improved, and emphasis is placed on store optimization. Consumption is still under pressure in the short term, and single-store revenue still needs to be improved. The company's spending and operating pace slowed in the first half of the year due to operating adjustments. With the opening of the European Cup in mid-late June, the company is expected to cooperate with active marketing activities to further improve the revenue level of individual stores. In terms of opening stores, the first half of the year is still the main store opening period, but the company does not assess the tasks of opening stores throughout the year. The core is to ensure a steady increase in single store revenue, or it may still adjust and shut down stores that do not operate well. From the perspective of a franchisee, although the payback period of Jewei stores has been extended after the pandemic, the operating stability and profitability of Jewei stores are still an excellent choice in the franchise business format, and the company is also continuously optimizing its structure and adjusting its business strategy, and it still has potential for growth in the medium to long term.

Optimistic about the company's privatization construction, which will help the medium- to long-term single-store revenue growth steadily. In the current consumer environment, by building a membership system and private domain system, transforming store-driven growth into brand-driven growth, or an important direction for the casual brine industry to break down, now major casual brine brands have begun to gradually focus on private domain construction. At the beginning of the year, Jubi made a good start through activities such as entering Douyin and cooperating with Tencent Yuanmeng Star, such as “Burst Your Neck and Fortune Bucket”, which sold 1 million barrels in 39 days, reflecting the good vitality of the exquisite brand and products online.

Subsequent companies will make full use of Douyin and Xiaohongshu to build a private domain to reduce platform costs. In addition, by allowing merchants to launch video accounts and bind them to the company's official account, they will increase users' activity. The company's current online and private transformation is still in its early stages, but the company has paid full attention to it. In the long run, it is expected to build up a significant core consumer group through brand strength to ensure steady and sustainable growth in single store revenue.

Marinade is full of vitality, and the company actively adapts to changes. Currently, the market is concerned about the vitality of casual marinated products and the growth of leading companies. We believe: 1) At the industry level, there is a continuous demand for halogen products, but the consumption scenario has changed, from brand stores to street side braised or online channels; 2) Therefore, at the company level, whether enterprises can adapt to changes in channel traffic and make appropriate adjustments is the key. Zhouheiya is developing “hot haloge+fresh goods” two-in-one stores, and at the same time, all enterprises have begun to strengthen online and brand building to improve private domain structures. We believe that after a period of painful reform, the company is expected to open up new traffic channels and enhance its growth center.

Profit forecasting, valuation and ratings: Optimizing the store structure and starting online and private sector construction is expected to drive medium- to long-term single-store revenue. We maintain the 2024-26 net profit forecast of 8.40/9.82/1,157 billion yuan. The current stock price corresponds to the 2024-26 PE valuation of 13/11/9 times, maintaining a “buy” rating.

Risk warning: Raw materials continue to rise, and single store repairs fall short of expectations.