Everbright Securities: Overweight rating to Guangzhou restaurants

2021-11-03Tang Jiarui and Li Zenan of Everbright Securities Co., Ltd. conducted a study on Guangzhou Restaurant and released a research report "2021 Third Quarter Report Review: Performance meets expectations, future production capacity release helps growth", this report gives an overweight rating to Guangzhou Restaurant, and the current stock price is 23.9 yuan.

Guangzhou Restaurant(603043)

essentials

The performance is in line with expectations, and the effect of expense control and control is improved: the revenue in the first three quarters was 3.016 billion yuan, an increase of 17.69% year-on-year, and the net profit attributable to the mother was 444 million, an increase of 23.41% year-on-year, and the eps was 0.78 yuan / share, and the performance was in line with expectations. Among them, Q3 revenue was 1.784 billion yuan, an increase of 10.15% year-on-year, and net profit attributable to the mother was 406 million yuan, an increase of 16.68% year-on-year, mainly due to the merger of Haiyue Taotaoju and the improvement of expenses.

The overall gross profit margin in the first three quarters was 38.26%, a decrease of 1.27pct year-on-year, mainly due to the increase in the proportion of quick-frozen business with lower gross profit. Inventory of 303 million, an increase of 43.12% year-on-year, mainly due to the increase in raw material reserves and seasonal commodity inventories; in terms of three fees, the sales expense ratio was 8.72%, a decrease of 0.96pct; the management expense ratio was 11.35%, a decrease of 0.16pct year-on-year; the financial expense ratio decreased by 0.17% year-on-year, mainly due to the increase in interest income; and the research and development expense ratio was 1.86%, a decrease of 0.29pct year-on-year. In the third quarter alone, the company's overall gross profit margin was 46.52%, a year-on-year decrease of 0.37pct; in terms of expenses, the sales expense ratio was 7.86%, a year-on-year decrease of 0.85pct; the management expense ratio was 10.40%, up 0.48pct year-on-year; the financial expense ratio was reduced by 0.57pct year-on-year; and the research and development expense ratio was 1.52%, a year-on-year decrease of 0.52pct.

Mooncake growth slowed down, Tao Taoju and table thickened catering industry revenue: by product, the first three quarters of the mooncake series product revenue of 1.287 billion, an increase of 8.40% year-on-year, although this year's Mid-Autumn Festival compared with last year's advance and repeated impact of the epidemic, but the company still timely adjusted the strategy of active marketing, maintain positive growth rate; frozen food revenue of 612 million, an increase of 5.35% year-on-year; other product revenue of 585 million, an increase of 28.15% year-on-year; catering industry revenue of 503 million, an increase of 59.03% year-on-year, Mainly due to the low base affected by the epidemic in the same period last year, and the merger of Haiyue Pottery in the third quarter.

In the future, the quick-frozen production capacity will be further released, and the layout of channels outside the province will accelerate: 1) The first phase of Meizhou trial production in the third quarter, follow-up gradual production will help the production capacity of the quick-frozen business to further break through; Xiangtan Phase II will be put into production in 2023, which is expected to add 38,500 tons of production capacity, supporting the acceleration of the growth of the frozen business. 2) The expansion outside the province continued to advance, the first three quarters of dealers increased by 146 / + 17.32%, the growth rate accelerated significantly compared with the first half of the year, dealer channel sales increased by 17.56%; in the sales area, dealers outside Guangdong Province increased by 100 / + 35.34%, sales outside the province increased by 19.46% year-on-year, and the expansion outside the province continued to accelerate. 51% of the company's equity was transferred by the original shareholder, the State-owned Assets Supervision and Administration Commission of Guangdong Province, to Guangzhou City Investment free of charge, and there will be more room for synergy between the company and the major shareholders in the future.

Earnings Forecast, Valuation and Rating: Considering the repeated impact of the epidemic, we have lowered our net profit forecast for 21-23 years by 3%/6%/6% to 5.6/6.9/840 million, respectively, maintaining an "overweight" rating.

Risk warning: food safety, raw material increase, production capacity delay risk.

A total of 25 institutions have given ratings in the last 90 days, 17 buy ratings and 8 overweight ratings; the average target price of institutions in the past 90 days has been 29.38; 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.