餐饮保持稳健增长，米面类竞争激烈量增价减。1）分渠道：1H24 零售及创新/餐饮市场收入同比-7.6%/+8.1%至29.8/6.8 亿元，受KA 商超渠道客流量持续下滑及公司加强KA 渠道应收账款风险控制，零售及创新市场收入下滑；受益于大B 渠道产品和服务优化，餐饮渠道保持稳健增长，我们估计大B 端收入增速表现好于小B 端。2）分模式：1H24 经销/直营/直营电商收入同比-7.1%/-6.0%/+60.1%至27.6/ 7.1/1.7 亿元，1H24 经销商数量相比年初降低334 家至3911 家，主因优化渠道质量；3）分产品：1H24 老三样（饺子、汤圆、粽子）/创新类面米/调制（涮烤等新品）/冷藏及短保产品收入同比-7.8%/-1.7%/+2.0%/-21.8%至20.6/10.8/4.6/0.3 亿元，速冻米面产品（老三样+创新类）收入同比-5.8%（量+1.5%、价-7.2%）。2Q24 results fell short of our expectations
The company disclosed 1H24 performance: 2Q24 revenue of 1.412 billion yuan, -4.74% year on year; net profit attributable to mother 0.103 billion yuan, or -34.36% year on year; net profit after deducting non-return to mother 0.071 billion yuan, or -49.36% year on year. The 2Q24 performance fell short of our expectations, mainly due to intense competition for C-end rice and noodles, which put pressure on prices and increased spending.
Development trends
Catering has maintained steady growth, and competition for rice and noodles is fierce, and prices have increased and decreased. 1) Channel division: 1H24 retail and innovation/catering market revenue was -7.6%/+8.1% to 2.98/0.68 billion yuan. Due to the continuous decline in KA supermarket channel passenger traffic and the company's strengthening of KA channel accounts receivable risk control, retail and innovation market revenue declined; benefiting from the optimization of big B channel products and services, the catering channel maintained steady growth. We estimate that the revenue growth rate of the big B side is better than that of the small B side. 2) Sub-model: 1H24 distribution/direct marketing/direct e-commerce revenue -7.1%/-6.0%/+60.1% to 27.6/ 0.71/0.17 billion yuan, the number of 1H24 dealers decreased by 334 to 3911 compared to the beginning of the year, mainly optimizing channel quality; 3) Product division: 1H24 old three kinds (dumplings, rice balls, rice dumplings) /innovative noodle rice/preparation (new products such as shabu-shabu) /refrigerated and short warranty products revenue -7.8%/-1.1.7%/+2.0% 8% to 20.6/ 1.08/0.46/0.03 billion yuan, revenue of frozen rice and noodle products (old three samples+innovative category) was -5.8% (volume +1.5%, price -7.2%).
Profitability fell short of expectations, and promotions and fees put pressure on prices and profits. 1H24/2Q24 net profit margin decreased 2.2/3.3ppt to 9.1%/7.3%, after deducting non-return net margin 2.6/4.5ppt to 7.3%/5.1%, 1) Gross profit margin: 1H24/2Q24 decreased 1.7/1.8ppt to 25.9%/24.9%, mainly due to increased promotional efforts in the retail market affecting prices, 1H24 retail and innovation/catering market gross margin -2.3/+0.8ppt to 26.0%/23.9% year over year. 2) Expense ratio: 1H24/2Q24 sales expense ratio increased 0.9/3.0ppt to 12.5%/13.0%, mainly due to increased market expenses; management expense ratio -0.1/+0.0ppt, equity incentive costs decreased year-on-year; R&D expense ratio was +0.1/+0.0ppt year-on-year, which was basically the same. In addition, the equipment depreciation of 13 million yuan also had an impact on the company's net profit margin.
2H24 outlook: B-side is expected to maintain steady growth, and profitability is still under pressure. B-side: The company continues to develop big B customers. With the increase in product supply and new customer development, we believe that revenue is expected to maintain steady growth; the growth rate of the small B-side is slowing down due to the environmental impact. C-side: The KA channel and the growth of traditional rice and noodle products are still under pressure, and distribution channels are declining or gradually stabilizing with the 4Q23 base. Profit side: Considering weak demand and competition not slowing down, we expect overall profitability to remain under pressure.
Profit forecasting and valuation
Considering weak demand and competition, the 2024/25 revenue was lowered by 4.8%/5.9% to 6.89/7.06 billion yuan, and the net profit to mother was lowered by 24.2%/27.1% to 0.57/0.597 billion yuan. The current stock price was traded 15.9/15.2 times P/E valuation in 2024/25, considering profit forecast adjustments, and the target share price was lowered by 20.0% to 12.0 yuan/share, corresponding to 18.5/17.7 times P/E valuation in 2024/25. Compared with the current stock price 16.1% upside. Consider that the company is a leader in frozen rice and noodles and continues to push forward reforms to maintain an industry performance rating.
risks
New product promotion fell short of expectations, channel expansion fell short of expectations, raw material prices fluctuated, and food safety issues.