Guojin Securities released a research report saying that maintaining the Jiumaojiu (09922) “buy” rating, the company's 2023 financial report once again showed Haidilao's outstanding operating strength and excellent cost control capabilities. It is believed that the basic market of the company's stock business is extremely stable, and that the company is actively exploring secondary brands to incubate the affordable hot pot brand “Hi Lao” hot pot during the period. If subsequent companies can repair the turnover rate and resume a more active expansion strategy, the valuation center is expected to recover.
The main views of Guojin Securities are as follows:
In 2023, net profit is expected to exceed 4.4 billion yuan, which is in line with the forecast.
In 2023, the company expects to achieve revenue from continuing operations of more than 41.4 billion yuan, an increase of more than 33.3% over the previous year; it is expected to achieve net profit of 4.4 billion yuan from continuing operations, an increase of more than 168.5% over the previous year. The operating performance is broadly in line with the bank's previous forecast (net profit of 4.55 billion yuan). With 2023H2, the company expects to achieve revenue from continuing operations of not less than 22.44 billion yuan, an increase of 57.7% over the previous year; it is expected to achieve net profit of 2.14 billion yuan from continuing operations, an increase of more than 12.5% over the previous year.
The net interest margin declined slightly in the second half of 2023, which is expected to be due to an increase in the share of labor costs.
2023H2's net profit margin was about 9.5%, marginally lower than 2023H1 (12.0%). Excluding one-time exchange rate factors, the 2023H2 operating level net interest rate is expected to be about 10.1% (2023H2 will generate exchange losses), which is still slightly lower than the 2023H1 operating level net interest rate of 10.9% (2023H1 will generate 193 million exchange income). This is due to the continued recovery in the turnover rate in the second half of 2023, due to increased store personnel reserves and higher labor costs due to increased employee dividends/remuneration.
With the help of the hot pot season and service innovation, the turnover rate continues to recover.
The fourth quarter is the traditional peak season for the hot pot industry. The festival scene is intense, and the demand for hot pot meals for many people is increasing. If we compare the turnover rate in the same period in '19, the company's recovery rate from October to December showed a month-on-month upward trend, and the recovery rate in December increased markedly. The overall store turnover rate is expected to be close to the level of December '19. Furthermore, in November 2023, the company's Shandong store clerk performed “Course 3” for customers, and the brand once again “went out of the market” because of its fancy service, which is expected to make a marginal contribution to the recovery of customer traffic.
The 2023 expansion strategy remains prudent.
According to the bank's tracking, the company opened a total of 9 new stores in selected locations throughout 2023. In addition, nearly 30 hard-core stores resumed business, while closing some stores with poor business conditions during the year. Therefore, the overall net increase in the number of stores is still relatively limited, and the expansion strategy continues to be cautious.
Risk warning: The recovery rate fell short of expectations, expansion fell short of expectations, customer unit prices declined, and competition intensified.