九毛九(9922.HK):怂火锅逆势增长 看好多品牌扩张

Jiumaojiu (9922.HK): Encourage hotpot to buck the trend and be optimistic about the expansion of many brands

國聯證券 ·  03/22  · Researches


The company issued an annual performance announcement for 2022. It achieved revenue of 4.01 billion yuan for the full year of '22, a slight decrease of 4.2% over the previous year; it achieved net profit of 50 million yuan, a year-on-year decrease of 85.5%; within the range of previous performance forecasts.

The epidemic has affected overall operations, and Hot Pot has performed brilliantly

In 2022, due to the spread of the epidemic and multiple rounds of prevention and control in major cities across the country, the company's restaurants suspended dine-in services for 38 days, seriously limiting the company's operations. Revenue losses due to suspension of restaurant operations or dine-in services are estimated to be 1.37 billion yuan. Looking at each brand, due to a decrease in the number of stores (7 stores closed throughout the year) +a decline in customer flow (a decline of 0.3), Jiu Maojiu's revenue fell 20.4% year on year; Taiji store expansion (net increase of 100 stores) hedged a decrease in customer flow (occupancy rate fell 0.8), revenue fell slightly by 5.6%, and its revenue share fell slightly by 1.2 pct; Hot Pot's efficient store expansion (expanding 18 stores throughout the year and maintaining a turnover rate of 2.5) boosted its brand restaurant revenue to about 196.8% year on year, and revenue share increased to around 7%.

Operating margins declined, and the profit of Jiumaojiu stores remained stable

Looking at the cost side, raw material costs accounted for 36.1% of revenue in 2022, a slight decrease of 0.7 pct from the previous year, rent and related expenses accounted for 2.1% of revenue, a slight decrease of 0.2 pct from the previous year, which remained stable. Affected by the decline in revenue, employee costs accounted for 28.3% of revenue, up 3.0 pct from the previous year, and depreciation of use-rights assets accounted for 10.1% of revenue, up 1.9 pct from the previous year. In the end, the company's overall store operating profit margin was 12.9%, down 6.5 pct from the previous year. Among them, the operating profit margin of Jiumao Jiujiu stores remained at 12.9%, and Taiji's operating profit margin fell 7.5 pct. It is expected to be related to its national layout and the suppression of passenger flow by the epidemic.

Taiji expanded steadily, and encouraged hot pot to gradually get better

According to the company's official account, as of March 18, there were 460 Taiji stores, an increase of 10 over the end of '22. It is expected that 120 new stores will be opened throughout the year, maintaining a steady expansion trend and seeking global share. Hot Pot had 30 stores during the same period, an increase of 3 over the beginning of the year. It is expected that 25 new stores will be added throughout the year. Referring to Taier Er and the rounded development path, Hot Pot is expected to accelerate the expansion of its stores with the help of the company's resource empowerment and strong brand. Furthermore, the company previously invested 9.96 million yuan to acquire land use rights in the Fuling area of Chongqing to use it as a production plant for hot pot condiments and compound seasonings, which is expected to effectively guarantee the expansion of standardized sales of front-end brands.

Profit Forecasts, Valuations, and Ratings

The company's revenue for 23-25 is estimated to be 76.6/108.9/148.6 billion yuan respectively. The corresponding growth rate is 91%/42%/36% respectively, and the net profit of the mother is 6.7/99/ 1.37 billion yuan respectively. The corresponding growth rate is 1267%/47%/38%, respectively, and EPS is 0.5/0.7/0.9 yuan respectively. Given the company's multi-brand operating strength, referring to comparable company valuations, the company was given 30 times PE over 24 years, with a target price of 20.5 yuan. Maintain a “buy” rating.

Risk warning: economic downturn; consumption recovery falls short of expectations; new market development falls short of expected risks.

The translation is provided by third-party software.

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