In the past two years, the catering industry has recovered rapidly, and many catering companies have rebounded sharply in 2023, and Jiumaojiu is one of them. However, the Internet celebrity brand "Taier Sauerkraut Fish", which accounts for three-quarters of its performance, has some "unspeakable hidden".
On the evening of March 22, Jiumaojiu released its financial report, in 2023, the company will achieve revenue of 5.986 billion yuan, up 49.43% year-on-year, and net profit attributable to the parent company will be 453.5 million yuan, up 820.17% year-on-year.
In contrast to the upward performance is the stock price of Jiumaojiu.
On the first trading day after the release of the earnings report (March 25), Jiumaojiu's share price opened at a price of 6.1 yuan, and then gradually declined, and finally closed at 5.6 yuan, down 4.44%. Since 2023, its share price has continued to decline, and today's closing price is more than 76% lower than the high of 23.94 yuan at the beginning of 2023.
Performance relies on a single brand
Jiumaojiu is a restaurant group with Chinese restaurant chain operation as the core, listed in January 2020, which founded and operates four Chinese catering brands in different segments: "Jiumaojiu Northwest Cuisine", "Taier Sauerkraut Fish", "Hotpot Factory" and "Lai Meili Sour Soup Grilled Fish". In February this year, it also founded the sour soup hot pot brand outside the mountain, increasing the sour soup hot pot track.
In 2023, Jiumaojiu's revenue will be 5.986 billion yuan, up 49.43% year-on-year, and the net profit attributable to the parent company will be 453.5 million yuan, up 820.17% year-on-year.
On the one hand, the performance of double profit growth is due to the environmental factors of consumption recovery, the increase in the number of operating days of the company's stores, the recovery of the turnover rate, and the growth of revenue. According to the National Bureau of Statistics, in 2023, the national catering revenue will be 5,289 billion yuan, an increase of 20.4% year-on-year. Among peers, Quanjude and Ajisen (China) turned losses into profits, and the net profits of Haidilao, Yum China, and Tongqinglou also increased significantly. It should be noted that due to the impact of the epidemic, the performance base of Jiumaojiu in 2022 is low, and if compared with the data in 2021, the company's revenue will increase by 43.21% in 2023, and the net profit attributable to the parent company will increase by 33.42%, which is actually not a big increase.
On the other hand, Jiumaojiu adopted an active expansion strategy last year, opening 180 new stores and 170 net stores, and the total number of stores increased from 556 at the end of 2022 to 726 by the end of 2023.
In terms of breakdown, Jiumaojiu's eponymous brand "Jiumaojiu" only contributed 630 million yuan in revenue, accounting for 10.5% of revenue, down 4.6 percentage points to 10.5%, and it is the Taier brand that carries the banner, which will contribute 4.477 billion yuan in revenue in 2023, an increase of 44.03% year-on-year, accounting for 74.8% of revenue.
In the long term, more than 7% of the company's revenue in recent years has come from Taier, and its performance dependence is high. From 2020 to 2022, the revenue from Taier accounted for 72.3%, 78.8%, and 77.6% respectively. And the degree of dependence may continue to increase in the future, the financial report pointed out that in 2024, the group plans to open 80 to 100 new Tai Er restaurants in Chinese mainland and 15 to 20 new Tai Er restaurants outside Chinese mainland. Up to 120 new Taier stores will be added, equivalent to 16.5% of all Group stores by the end of 2023.
Photo by Zuo Yu
In fact, the recovery of Taier, who carried the banner for Jiumaojiu, was not good, and it was more about attracting customers to enter the store through price reductions.
The recovery momentum at the beginning of 2023 is relatively strong, and the turnover rate of Taier has increased from 3.5 times/day in 2022 to 4.3 times/day in mid-2023, but in the second half of the year, affected by the weakening of consumption power, the turnover rate has dropped to 4.1 times/day by the end of 2023, which is not even lower than the 4.4 times/day in 2021 during the epidemic period. The research report of Guojin Securities pointed out that the turnover rate of Taier only recovered to 68% in 2019.
In order to improve performance, Taier further improved the cost performance and implemented three major actions, namely, making the brand more friendly (allowing table sharing, etc.), making the product more warm (heating base, etc.), and making the consumer group wider (takeaway single set meal, etc.). This year, the per capita consumption of Taier's customers also dropped from 77 yuan in 2022 to 75 yuan, and in 2021, the value was still 80 yuan.
On the group purchase platform, the discounted price of Taier sauerkraut fish "2 people check-in top package" is 14.35 billion yuan, and the converted per capita price is less than 72 yuan.
The price of hot pot is high and the profit is low
Jiumaojiu is not unaware of the problem of dependence on the Taier brand, and in 2020, 2021, and 2023, it will launch the brands of hot pot, Lai Meili grilled fish, and Xian Xian Yuemu in 2020, 2021, and 2023 respectively. Judging from the current situation, the company is interested in the development momentum of the hot pot.
In 2023, Jiumao Jiuxin opened 35 new hot pot restaurants, with a total of 62 restaurants by the end of the year, contributing 807 million yuan in revenue that year, a year-on-year increase of 210.4%, and the proportion of revenue rose from 6.5% in 2022 to 13.5% in 2023, and the gap with Taier is still obvious, while other brands, including Lai Meili Grilled Fish and Enjoying Fresh Yuemu, only contributed about 73 million yuan in revenue. According to the disclosure, in 2024, Jiumaojiu also plans to open 35 to 40 new hot pot restaurants.
Similar to the Taier problem, the turnover rate of instigated hot pot has increased from 3.6 times/day in 2022 to 3.8 times/day in 2023, but the per capita consumption of customers has also dropped from 128 yuan in the same period to 113 yuan, a decrease of about 12%. This is the result of Jiumaojiu's active price adjustment. The Company pointed out that the decrease in per capita consumption of Taier customers in Chinese mainland and hot pot was due to the adjustment of menu offerings and food prices in consideration of internal and external factors such as market conditions and industry competition landscape.
At the same time, the hot pot that Jiumaojiu bets on is still in the expansion stage, and the profit contribution is not high.
Among the Taier, Jiumaojiu and Jiumaojiusan brands, the per capita consumer price of customers of Taier, Jiumaojiu and Jiumaojiu is the highest, but its store-level operating profit margin is the lowest, only 12.2%, while Taier's is 19.3% and Jiumaojiu's is 17.6%, which also lowers the overall store-level operating profit margin to 18%.
In addition to the expansion of self-operated stores, in February this year, Jiumaojiu also announced the gradual opening of its Taier sauerkraut fish and Shan's sour soup hot pot franchise and cooperation business.
In fact, since the second half of 2023, Hefu Lao Noodles, Le Caesar, Jiumaojiu, and Haidilao have successively announced their development and franchise. Everbright Securities pointed out that after experiencing the test of the epidemic, catering companies have realized the importance of diversifying operational risks and reducing leverage, and opening up franchises has begun to become a new choice for brands, "through the franchise model, it is conducive to the company to make full use of franchisee resources, accelerate brand expansion and regional penetration, and reduce its own business risks."