Zhou’s views and investment suggestions
Green tea group submitted the prospectus: the company’s 21-year income was 2.29 billion yuan / + 46.1%, and the net profit was 110 million yuan, realizing the turnaround of losses. As of the feasible date (February 25, 2022), the company has 236 restaurants, covering 18 provinces, 4 municipalities and 3 autonomous regions in China. In 2020, the market share of leisure Chinese restaurants in China was 0.5%, ranking fourth. We believe that the company’s competitive advantage lies in: the main integrated cuisine, strong menu innovation ability, fast update speed, timely tracking the market trend, catering to the changing tastes of consumers and a wide audience. The highly standardized business model simplifies the production of food materials, improves production efficiency and supports the rapid expansion of stores. The funds raised by the company are mainly used for store expansion. It plans to expand 75-100 stores every year in the next three years. In addition, the fund-raising is also used to repay bank loans, purchase centralized food processing facilities, improve the group’s information technology and related infrastructure, supplement working capital, etc.
Last week’s catering data tracking: the epidemic relapsed point by point last week, the consumption pressure of catering stores around the country was large, and the recovery rate of takeout consumption was better. According to the data of delicious food last week (2022 / 3 / 5 ~ 2022 / 3 / 11), the catering flow is still under pressure. The number of stores has returned to 64.8% on the benchmark day, and the consumption intensity of stores and takeout has decreased by 6.4% and increased by 13.6% on average compared with the benchmark day.
Investment suggestion: Catering suggestions focus on the main brand single store model, which is efficient and maintains a stable rhythm of expanding stores; Social scenes can replace Helen’s company with weak substitutability and high degree of standardization. The hotel pays attention to the industrial rebound opportunities in the future recovery process, and it is suggested to pay attention to Shanghai Jin Jiang International Hotels Co.Ltd(600754) , Btg Hotels (Group) Co.Ltd(600258) , Huazhu group.
Data and announcement tracking
Market review: last week (2022 / 3 / 7 ~ 2022 / 3 / 11), CSI 300 and hang seng index fell 4.2%, 6.2% and social services (Shenwan) fell 7.9% respectively. In breakdown, catering A shares and Hong Kong stock indexes fell 3.5% and 16.2% respectively, hotel A shares and Hong Kong stock indexes fell 13.3% and 18.9% respectively.
Industry news: 1) Hilton, Hyatt and Accor stopped developing new hotel business in Russia. 2) Huatian Hotel Group Co.Ltd(000428) subsidiary Beijing Haobo went bankrupt. 3) The number of hotels operated by Accor Group in China has exceeded the 500 mark. 4) McDonald’s, Starbucks and Coca Cola suspended their business in Russia. 5) The epidemic relapsed and some catering stores in Shanghai were under pressure.
Announcement of key companies: Zhongyin Babi Food Co.Ltd(605338) released the annual performance express of 2021, realizing revenue of 1.38 billion yuan / + 41.1%, net profit attributable to parent company of 310 million yuan / + 79.2%, deducting net profit attributable to non parent company of 150 million yuan / + 18.1%. Xiabu Xiabu 2021 loss Btg Hotels (Group) Co.Ltd(600258) shareholder reduction.
Risk tips
The epidemic situation is repeated, the effectiveness of a single store is less than expected, the lease term is too long, the speed of expanding stores is less than expected, the rising cost of food materials and food safety problems, the recovery of terminal demand is less than expected, and the industry competition is intensified.
