Shanxi Securities: Overweight rating given to Guangzhou restaurants

2021-10-28Zhang Xiaolin of Shanxi Securities Co., Ltd. conducted a study on Guangzhou restaurants and released a research report "Tao Taoju consolidated performance, production bases have been put into production to break through the bottleneck of production capacity", this report gave an overweight rating to Guangzhou restaurants, the current stock price is 21.99 yuan.

Guangzhou Restaurant(603043)

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The company released the third quarter of 2021 financial report, during the period to achieve revenue of 3.016 billion yuan (+13.71%), net profit attributable to the mother of 444 million yuan (+23.41%), deduction of non-attributable net profit of 431 million yuan (+19.78%), EPS0.78 yuan. Among them, Q3 achieved revenue of 1.784 billion yuan (+10.15%), an increase of 317.51% from Q2; net profit attributable to the mother of 406 million yuan (+16.68%), which was a profit from Q2; and deduction of non-attributable net profit of 401 million yuan (+16.45%). The performance of the third quarter was better, mainly due to the consolidation of Tao Taoju's revenue since July 1.

In the third quarter, the traditional peak season of mooncake sales drove the food business to achieve revenue of 2.484 billion yuan (+12%). In terms of sub-business, the mooncake series products achieved revenue of 1.287 billion yuan (+8.4%); the revenue of quick-frozen food was 612 million yuan (+5.35%), which was significantly slowed down due to the high base of the epidemic in the same period last year; the revenue of other products was 584 million yuan (+28.15%); and the revenue of the catering industry was 503 million yuan (+59.03%), mainly due to tao taoju's merger since July. In terms of sales areas, Guangdong Province achieved revenue of 2.246 billion yuan (+16.8%), accounting for 74.47% of the overall revenue; domestic revenue from outside Guangdong Province was 704 million yuan (+19.46%), accounting for 23.34% of the overall revenue.

During the period, the company's gross profit margin fell by 12.76pct to 38.26%, and the overall expense ratio decreased by 13.2pct to 17.6%. The decline in gross profit margin was mainly due to the epidemic in the Q2 Guangzhou-Shenzhen region dragging down the catering business. The sales expense ratio was 8.72% (-13pct), the management expense ratio was 9.49%, which was basically the same as that of the same period last year, the R&D expense ratio was 1.86% (-0.22pct), and the financial expense ratio was -0.6% (-0.19pct).

Investment advice: The impact of the local epidemic on the catering industry was basically digested in Q2. With the production of meizhou phase I and the construction of Xiangtan Phase II, the quick-frozen business is expected to have a production capacity of 38,500 tons (an increase of 0.6 million tons of production capacity). With the continuous production of production bases and the gradual solution of production capacity bottlenecks, the food business will continue to thicken the company's performance, stabilize brand development, and smooth systemic risks in the catering industry. From the perspective of channel scale, the company has gradually gone out of Guangdong, deep ploughing in South China, and radiating the whole country, and the proportion of online revenue has continued to increase. We expect the company's EPS for 2021-2023 to be 1.23\1.6\1.8, corresponding to the company's closing price of 19.99 yuan on October 27, and pee of 16.2\12.4\11.1 for 2021-2023, maintaining the "overweight" rating.

There is risk

The risk of rising prices of food raw materials; the risk of major shareholders reducing their holdings; the risk of the impact of the epidemic on the catering industry.

A total of 23 institutions have given ratings in the last 90 days, 15 buy ratings and 8 overweight ratings; the average target price of institutions in the past 90 days has been 30.29; the Securities Star Valuation Analysis Tool shows that Guangzhou Restaurant (603043) good company rating is 3.5 stars, good price rating is 3.5 stars, and valuation comprehensive rating is 3.5 stars.