Incident Overview
Haidilao announced its 2024 interim results. 2024H1, the company achieved revenue of 21.491 billion yuan/ +13.8%; core operating profit of 2.799 billion yuan/ +13.0%, core operating profit margin 13.0% /-0.1 pct; net profit to mother 2.038 billion yuan/ -9.7%, and net interest rate to mother of 9.5% /-2.5pct, mainly affected by changes in exchange profit and loss and cancellation of preferential VAT deduction policies. In addition, the company plans to pay an interim dividend of 1.939 billion yuan (0.358 yuan per share), with a dividend payout ratio of 95%.
Analytical judgment
The turnover rate has increased significantly, and the quality of operation of new stores is high
2024H1, Haidilao Restaurant's overall turnover rate is 4.2 times/+0.9 times, the same store turnover rate is 4.2 times/+0.8 times, and the new store has a turnover rate of 4.6 times. The new store maintains a high operating quality; the customer unit price is 97.4 yuan/ -5.3%, mainly due to changes in product consumption structure and increased discounts. 2024H1, Haidilao's restaurants closed net of 39 to 1,343, of which 11 new restaurants were opened and 43 were closed, maintaining the principle of prudent expansion; with 2024H2, the company will continue to use a bottom-up approach, and the number of stores opened is expected to increase significantly compared to 2024H1.
The reduction in procurement prices led to an increase in gross margin, and the company's gross profit margin remained stable at 2024H1, and the company's gross profit margin was 61.0% /+1.7pct, mainly due to lower procurement prices for raw materials and consumables; employee costs accounted for 33.3% /+2.7pct, mainly because the company raised the comprehensive salary and benefits level of employees and supplemented some personnel; depreciation and amortization accounted for 6.2% /-1.7pct, mainly due to the previous depreciation and amortization of properties, plants and equipment in some stores; rent and related expenses accounted for 1.0% /-0.1pct Percentage of expenses 3.4% /+0.2pct, travel and related expenses accounted for 0.4% /same year-on-year; other expenses accounted for 4.1% /+0.5pct, mainly due to increased marketing activities, optimization of management systems and increased sales, which led to an increase in human resources and other consulting service expenses, daily maintenance expenses, and warehousing expenses. 2024H1, the company's core operating profit margin was 13.0% /-0.1pct, which remained relatively stable.
Continuously optimize operating efficiency, encourage new brands and new business companies to take multiple measures to improve service quality and operating efficiency, implement a multi-store management model, further clarify the functions of headquarters, regions, and stores through the “three forms” (operating table, management table and basic table), and continuously optimize and improve store management. In addition, the company launched the “Red Pomegranate Program” to encourage the incubation and development of more new catering brands and businesses; the company's senior management team has formed the “Five Masters of Operation” to focus on innovation and entrepreneurship projects in five major areas: entrepreneurship mechanism, product innovation, supply chain support, operational collaboration, and marketing support. 2024H1, the company has a total of 5 entrepreneurial projects, including “Yayoi Yakiniku Restaurant” and “Xiaohi Hot Pot”. The types include yakiniku, hot pot, Chinese fast food, etc., covering more price ranges and consumer groups.
Investment advice
Based on the interim results, we adjusted our previous profit forecast. The company's revenue for 2024-2026 is 45.277/46.587/48.595 billion yuan (the original forecast was 45.965/49.34/52.77 billion yuan), and net profit to mother is 4.545/5.024/5.371 billion yuan respectively (the original forecast was 5.108/5.587/6.022 billion yuan), and EPS is 0.82/0.90/ $0.96 (originally forecast was $0.92/1.00/$1.08). The latest stock price (closing price of HK$12.26 on August 27 and exchange rate of 1HKD=0.91 CNY) corresponds to PE 14/12/12 times, respectively, maintaining a “buy” rating.
Risk warning
The recovery in consumer spending intentions fell short of expectations, competition in the industry intensified, and the turnover rate of major brands declined.