The hot pot industry has experienced a "dark" period for nearly a year. Since February last year, investors have sold wildly. Haidilao (06862) and Xiabu Xiabu (00520) at the head of the industry have both fallen by 80%. At present, there is no sign of stopping the decline. However, even so, qixintian International Holdings, which is engaged in seafood and hot pot business, still submitted a statement to the Hong Kong stock exchange.
Zhitong finance app learned that on January 12, qixintian International Holdings was listed on the main board of the Hong Kong stock exchange, with CMB international and Guotai Junan Securities Co.Ltd(601211) international as joint sponsors. According to frost Sullivan, the company is the largest seafood restaurant in China, with a market share of 1.2%, and ranks third in China's hot pot restaurant market, with a market share of 0.3%.
The investment environment of the industry is poor, and the attention of qixintian international holding market is expected to be very low. However, compared with the capital, the fundamentals of individual stocks are the most important. What about this company?
The operating efficiency climbed and the restaurant accelerated its expansion
Zhitong finance app learned that qixintian International Holdings was established in Jiangsu in 2009. It enters the market with seafood and hot pot restaurants, and takes Jiangsu as the center to radiate the restaurants to the surrounding provinces and cities. So far, it has operated 256 restaurants in 48 cities in 9 provinces and one municipality directly under the central government, including more than 100 restaurants in all line cities in Jiangsu Province. In addition, the company launched the takeout business in 2019, and its performance is driven by both restaurant operation and takeout business.
The expansion speed of the company has accelerated in the past two years, and the increase of revenue scale and profit margin have been significantly improved. In 2020 and the first September of 2021, the growth rates of the company's revenue and shareholders' net profit were 10.97%, 49.5%, 112.3% and 161.6% respectively. In terms of business, the revenue from restaurant operation and takeout business increased by 8.5%, 50.55%, 53.5% and 48.4% respectively. In the first September of 2021, the company's revenue scale was 1.48 billion yuan, and the net interest rate increased to 17.53%.
The company's takeout business is essentially an online sales channel operated by restaurants. Since 2020, the revenue contribution of online sales channels has been relatively stable, at about 16%. The core driver is offline restaurant operation, with a revenue contribution of more than 83%. Up to now, the company has 256 restaurants, and the net increase in restaurants in 2019 / 2020 / 2021 is 65 / 27 / 49 respectively, mainly distributed in the first and second tier cities, with 112 and 77 restaurants respectively, accounting for more than 70% of the number and revenue of restaurants. In order to cooperate with the restaurant operation, the company has established a storage center, has three in-service storage centers in Shanghai, Nanjing and Jinjiang, and rented a warehouse in Hangzhou. It is expected to start operation in the first half of 2022.
Qixintian international holding restaurant is mainly distributed in the city's food street, large shopping malls and other places with large flow of people, and the turnover rate is stable at about 2 times. In the first September of 2021, the turnover rates of tier 1, tier 2 and Tier 3 cities are 2.1, 2.2 and 2.3 times respectively, and the per capita passenger unit price is 139, 130 and 119 yuan respectively. In 2021, the company changed its stable pricing strategy, and the passenger unit price of each line city increased by 12% as a whole.
The company uses the dining experience of two meals in one pot to attract family, friends and business customers. In terms of dishes, it claims that the patented mixed seasonings and sauces are kept confidential, and the production process is divided into five parts, which makes it difficult for competitors to copy. In terms of technical preservation, the company began to research and develop low-temperature preservation technology in 2016, which greatly improves the preservation time of seafood. However, the company's product R & D team consists of only 13 members, accounting for 0.7%.
The customer unit price, turnover rate and same store revenue are steadily increasing. The operating efficiency of the restaurant increased by qixintian International Holdings every year looks good. The company wants to accelerate the expansion speed. It plans to open 70, 100 and 130 restaurants from 2022 to 2024, with the expansion speed of 27.3%, 30.7% and 30.5% respectively. As of September 2021, the cash on the account of the company was only RMB 30 million, which was difficult to support its expansion plan.
Divide up cash flow before listing, and market funds may not buy
According to the hearing data, the average cost of opening a new qixintian restaurant by qixintian International Holdings is 1.6 million yuan. Most of the restaurants that have been put into operation reach profit and loss balance within 1-4 months, and the average cash investment return period of the restaurants that have been put into operation is about 18 months. The operating efficiency of the company's restaurants has improved significantly. In 2020, the overall profit margin increased by 6.3 percentage points without significant increase in customer unit price. In the first September of 2021, under the increase in customer unit price, the operating profit margin of its restaurants was 26.8%, an increase of 7 percentage points year-on-year, of which the contribution of third tier and below cities was the most obvious.
In recent years, the company has been weakening its dependence on suppliers and improving its procurement pricing ability through decentralized share. In the first September of 2021, the procurement of the top five suppliers accounted for 18.2%, down 23.2 percentage points compared with 2019, of which the procurement of the largest supplier accounted for 6.4%, down 11.7 percentage points compared with 2019. In the first September of 2021, the overall purchase of raw materials and consumables accounted for 42.6% of the revenue, a year-on-year decrease of 6.2 percentage points.
As of September 2021, the number of loss making restaurants of the company was 6, with a year-on-year decrease of 21, accounting for 2.36%. The total loss was only 640000 yuan, that is to say, the newly added restaurants in the past two years basically realized profits. Due to the improvement of operating efficiency, the net profit of shareholders of the company increased from 6.3% in 2019 to 17.5% in the first September of 2021, and the average return on assets increased to 40%. From the perspective of peers, Haidilao and sipping sipping have reduced operating efficiency and profits in recent years. According to the records over the years, the return on assets has not exceeded 20%.
In fact, under the influence of the epidemic since 2020, the overall operation of the catering industry has indeed been depressed. According to frost Sullivan, the scale of China's catering market will be 3.95 trillion yuan in 2020, a year-on-year decrease of 15.4%, and the industry is expected to pick up about 20% in 2021. From the head of the industry, although the revenue of Haidilao and Xiabu increased significantly in 2021, the profit did not recover, and the performance of qixintian International Holdings was obviously divorced from the industry.
It is worth noting that qixintian International Holdings was restructured before listing, resulting in a payment of up to 186 million yuan and a high dividend of 190 million yuan. In the first September of 2021, the net outflow of financing activities reached 474 million yuan, 1.32 times the current assets in 2020 and 57% of the total assets. This is why the company still has more than 200 million yuan of cash on its account at the end of 2020, leaving less than 30 million yuan before listing.
Before listing, shareholders divide the company's assets into one wave. After listing, they expand through the funds raised, thicken the share capital, and harvest another wave through the reduction of holdings, which is also a good practice for listed companies with "family nature". The equity of qixintian International Holdings is basically absolutely controlled by the Ruan family, of which Ruan Tianshu holds the largest stake, accounting for 59.6%, and the Ruan family holds two of the four executive directors.
From a comprehensive point of view, although qixintian International Holdings' finance is very good, its performance growth and operation data have been significantly improved, and its expansion plan is also attractive, the market may be worried about its high debt ratio, performance out of the industry, high dividend distribution before listing and family enterprises. The cash on the account before listing is exhausted, and the expansion funds are basically paid by the shareholders after listing. In addition, the investment environment of the industry is not good, even if the market funds are probably not paid through the hearing.
