Guosen Securities: Gives Guangzhou Restaurant a buy rating

2021-10-29Guosen Securities Co., Ltd. Zeng Guang, Zhong Xiao, Jiang Tian conducted a study on Guangzhou restaurants and released a research report "2021 Third Quarter Report Review: The epidemic disturbs mooncake sales, production capacity release supports stable growth in performance", this report gives a buy rating to Guangzhou restaurants, and the current stock price is 22.74 yuan.

Guangzhou Restaurant(603043)

The performance of the first three quarters increased by 23% in line with expectations, and Tao Taoju and the table thickened

In the first three quarters, the company achieved revenue of 3.016 billion yuan / + 17.69%, attributable performance of 444 million yuan / + 23.41%, after deducting non-performance of 431 million yuan / + 19.78%, EPS 0.78 yuan, which is basically consistent with our performance prospects and in line with expectations. Among them, the third quarter revenue increased by 10.15%, the attributable performance increased by 16.68%, the performance growth is good, it is expected to be mainly due to the merger of Tao Taoju and the improvement of expenses.

The growth of the mooncake under the epidemic slowed down, the quick-frozen third quarter accelerated, and Tao Taoju and the table thickened its income

In the first three quarters, the company's food business revenue was 2.484 billion yuan / +12%: quick-frozen revenue was 612 million yuan / +5%, of which the third quarter increased by 22%, down 1% (20H1 high base) in the first half of the year [year-on-year] significantly improved, is expected to be related to the release of production capacity in Meizhou Phase I; mooncake revenue of 1.287 billion yuan / +8%, affected by high base and epidemic; other food revenue increased by 28%. Catering revenue of 503 million yuan / + 59%, Tao Taoju on July 1 and the table pull, excluding the impact of the merger, it is expected that the same store in the third quarter has not yet recovered to the pre-epidemic. Channel-side distribution revenue increased by 13% and outside the province by 19%. Contract liabilities increased by 33% at the end of the third quarter, showing that Q4 was relatively supportive. The gross profit margin in the first three quarters decreased by 1.28pct, which is expected to be mainly due to the drag of catering and the increase in the proportion of quick-freezing. During the period, the rate decreased by 1.30pct, of which the sales/R&D/finance rate was reduced by 0.96/0.30/0.18pct, and the management rate was increased by 0.13pct.

The epidemic has disturbed the growth of mooncakes, and we are concerned about the development of quick-frozen after the release of production capacity

Looking forward to the future, 1) quick-frozen business, the first phase of the mid-year Meizhou trial production, follow-up gradual production is expected to improve the quick-frozen production capacity; the second phase of the central line Xiangtan is expected to add 38,500 tons of production capacity (32,500 tons in 2020), the construction period of 2 years, coupled with the expansion of categories and channels, is expected to support the sustained and rapid growth of quick-frozen revenue. 2) Mooncake business, the epidemic has affected the relationship between supply and demand to a certain extent, and the revenue growth has fluctuated slightly, but it is expected to maintain stable growth in the future. 3) The catering business is affected by the epidemic in the short term, and it is recommended to continue to track; Tao Taoju's 6 stores were consolidated on July 1 (holding 55% of the shares), which significantly increased their income, and estimated that the net profit of 6 stores during the non-epidemic period was about 30 million, which is expected to further increase profits after the epidemic improved; and the introduction of war investment is expected to further stimulate the vitality of the catering industry.

Risk Warning:

Macro, epidemic and other risks, food hygiene and safety, acquisition integration, production capacity release is less than expected.

Short-term tracking of the epidemic, capacity expansion is expected to support the growth of the mid-line, maintain "buy" to consider the impact of the epidemic, and lower the 21-23 EPS to 0.94/1.12/1.31 yuan (formerly 0.96/1.20/1.41 yuan), corresponding to PE21/18/15x. The short-term epidemic has affected the mooncake and catering business, and the frozen business has been supported by the release of medium-term production capacity and channel expansion, maintaining the "buy" rating.

A total of 24 institutions have given ratings in the last 90 days, with 15 buy ratings and 9 overweight ratings; the average target price of institutions in the past 90 days has been 29.58; the Securities Star Valuation Analysis Tool shows that Guangzhou Restaurant (603043) Good Company is rated 3.5 stars, Good Price is rated 3.5 stars, and valuation comprehensive rating is 3.5 stars.