主要品牌的量价关系与同店情况来看，2024Q2 肯德基客单价为37 元，同比-7%（2019Q2 为35 元），同店销售额同比-3%，同店交易量同比+4%；必胜客客单价为88 元，同比-9%（2019Q2 为115 元），同店销售额同比-8%，同店交易量同比+2%，整体量价关系顺应时代趋势。Event: The company released its quarterly report for the second quarter of 2024, with revenue of 2.68 billion US dollars, +0.94% (excluding exchange rate +4%), achieving single-quarter operating profit of 0.266 billion US dollars, +3.50% (excluding exchange rate +7%), core operating profit of 0.275 billion US dollars, +11.34% year over year, net profit of 0.212 billion US dollars, +7.61% year over year (excluding exchange rate + 11%). The company's performance has been improving steadily, and profits have increased significantly over the same period last year.
In terms of KFC's business, 2024Q2's revenue in a single quarter was 2.014 billion US dollars, +1.5% year-on-year (excluding +5% exchange rate) in a high base last year, mainly due to the net additional store contribution of 8% this quarter. 2024Q2 achieved operating profit of 0.264 billion US dollars in a single quarter, -3.3% year over year, and core operating profit of 0.273 billion US dollars, +3.8% year over year; restaurant profit margin was 16.2%, -1.1 pct year over year, excluding projects affecting comparability at the restaurant level, -0.6 pct year over year, mainly due to the addition of cost-effective products to drive traffic growth and wage costs, which was partially offset by favorable raw material prices and improved operating efficiency. On the channel side, 2024Q2 takeout sales increased 12% year over year, accounting for about 38% of restaurant revenue. The non-dine-in business accounts for approximately 67% of restaurant revenue. On the operating side, 2024Q2 added a net of 328 stores, of which 74 new franchisees were added, accounting for 23%. As of 2024H1, the total number of stores reached 10,931, +14.3% year-on-year.
In terms of Pizza Hut's business, 2024Q2's revenue in a single quarter was 0.54 billion US dollars, -2.5% (excluding exchange rate +1%), mainly due to the net additional store contribution of 8% in the current quarter; operating profit was 40 million dollars, +13% (excluding exchange rate +18%), which hit a new high in the second quarter; core operating profit was 41 million dollars, +23% year over year; restaurant profit margin was 13.2%, +0.8 pct year on year, excluding items affecting comparability at the restaurant level, mainly +1.1 pct year on year. Increased operational efficiency offsets the impact of increased cost-effective products and rising wage costs. On the channel side, 2024Q2 takeout sales increased 6%, accounting for about 38% of restaurant revenue. The non-dine-in business accounts for approximately 48% of restaurant revenue. On the operating side, 2024Q2 added a net 79 new stores. As of 2024H1, the total number of stores reached 3504, +14.1% year-on-year.
Looking at the volume-price relationship of major brands and the same store situation, the 2024Q2 KFC customer unit price was 37 yuan, -7% (2019Q2 was 35 yuan), same-store sales -3%, same-store transaction volume +4% year-on-year; Pizza Hut's unit price was 88 yuan, -9% (2019Q2 was 115 yuan), same-store sales were -8%, and same-store transaction volume was +2%. The overall volume-price relationship conforms to the trend of the times.
The company's digital construction continues to advance. The company's 2024H1 digital order revenue reached 2.2 billion US dollars, accounting for 90% of the company's restaurant revenue. The total number of KFC and Pizza Hut members exceeds 0.495 billion. Member sales account for about 65% of KFC and Pizza Hut system sales, increasing customer stickiness.
In terms of the company's dividend repurchases, the company returned approximately $0.249 billion to shareholders in 2024Q2 (repurchase 0.187 billion, dividend 0.062 billion) in the form of stock repurchases and cash dividends. Since the beginning of the year, the company has given back $0.994 billion to shareholders (repurchases of 0.869 billion, dividends of 0.126 billion dollars), exceeding the amount for the whole of 2023.
Profit forecasting and investment advice
The company is a leading enterprise in the domestic restaurant industry. It is deeply involved in Western-style fast food circuits, and has strong replicability to enable the company to grow. Based on the results for the second quarter of 2024, we adjusted the company's profit forecast for 24-26. We expect the company's net profit to be 0.821/0.911/1.066 billion US dollars for 24-26 (0.887/0.991/1.163 billion US dollars for the previous 24-26 years), corresponding to the current stock price PE 16/15/12 times, respectively.
Considering that the company has a strong market position in the domestic catering industry, it maintains a “buy” rating.
Risk warning
The company's store expansion rate fell short of expectations; demand recovery in the restaurant industry fell short of expectations; operating cost control fell short of expectations; risk of changes in raw material prices; risk of market competition; risk of food safety.
