This report is read as follows:
The performance in 2016 was in line with expectations; the catering business picked up, the gross profit of the manufacturing business rose, revenue fell, net profit benefited from the disposal of assets increased significantly, brand word-of-mouth and product quality to ensure future performance.
Main points of investment:
The performance is in line with expectations and holdings are increased. ① 's catering business rebounded steadily in 2016, and net profit benefited from asset disposal became positive; ② increased the influence of its brand and expanded its online business, considering that the gross profit margin of catering business could not be increased rapidly for the time being, and lowered its EPS from 2017 to 2018 to 0.04 (- 0.02) / 0.02 (- 0.01) yuan, maintaining the previous 7.5xPS valuation assumption and maintaining the target price of 11.49 yuan.
Performance description: the company's 2016 revenue is 500 million yuan / + 0.31%, the parent profit is 1235 yuan / + 139.03%, and the non-net profit is-2294 yuan / + 41.47%.
The main catering industry has rebounded steadily, and online sales have increased significantly. ① optimized its product structure and store promotion efforts, with revenue of 399 million yuan / + 1.21% in the main catering business; 64 new small chain stores; with the help of catering + Internet, e-commerce sales increased by 129.77% over the same period last year; but the gross profit margin of catering decreased by 1.79pct to 29.11%, mainly due to increased labor costs; ② changed its marketing strategy to consolidate seasonal products (revenue increased by 60.52%) The revenue of the food production industry is 3984 yuan /-13.4%, and the gross profit margin is 46.99% and 3.23%; the net profit of ③ Defa Hotel from the disposal of non-current assets increases by 48.64 million yuan; the rate of expenses during the period is 39.41%/-1.79pct, of which the rate of management expenses is 6.04%/-2.69pct (the reduction of consulting fees and the adjustment of tax subjects), and the rates of sales and financial expenses are increased by 0.88/0.02pct respectively.
Increase the publicity of time-honored brands and focus on marketing integration. Eleven characteristic brands of ① have been awarded "Chinese time-honored Brands", and their brand influence has been continuously improved. ② has achieved initial results by expanding marketing channels and models, building an online sales platform and focusing on self-media publicity. ③ integrates industry resources, carries out diversification, and goes deep into the training, tourism and education industries.
Risk hints: the impact of seasonal products on the company's performance is uncertain; competition in the catering market intensifies.