Juewei Food (603517) 2019 Interim Report Review: Fast Store Opening Continues Q2 Performance Exceeds Expectations

Juewei Food (603517) 2019 Interim Report Review: Fast Store Opening Continues Q2 Performance Exceeds Expectations
Matters: The company released its semi-annual report for 2019, and H1 achieved operating income of 24.900 million, an increase of 19.4%, net profit attributable to mother 4.0 billion, an increase of 25.8%, attributable to non-net profit3.900 million, an increase of 25.2%, achieving a budget benefit of 0.69 yuan.Among them, Q2 achieved operating income of 13.400 million, an increase of 19.2%, net profit attributable to mother 2.200 million, an increase of 30.8% Q2 performance slightly exceeded expectations.Q2 company revenue increased by 19.2%, slightly higher than market expectations.The gross profit margin is 35.0%, down by 1.4pct, period fee 15.0%, down with 0.7pct, net profit increased by 30.8%, exceeding market expectations. Q2 store opening momentum is strong, the same store growth rate remained stable.Q2 revenue increased by 19.2%, continued to achieve high growth, the main reason is still accelerating store opening, same store steady growth.1) The preferential policies for opening stores continued to Q2, and the momentum of opening stores is still strong.As of the end of June, there were 10,598 stores and a net increase of 683 in H1. We expect a net increase of about 330 in Q2, which will continue to accelerate the pace of opening stores in the first quarter. Mainly, there are still preferential policies for opening stores in some regions of Q2, and franchisees are actively opening stores.2) The new store has entered a stable period and gradually contributed revenue.In 4Q18 and 1Q19, the stores opened and merged. The new store operation gradually entered a stable period, and the revenue was reflected in Q2.3) Promotion + price increase + store upgrade, same-store growth is stable.In 1H19, the company continued to carry out full reduction activities. Initially, product price increases in some areas replaced the price cuts in disguise, high potential energy store upgrades, and other factors, which caused the same store revenue growth rate to stabilize at 5% to 5%;”Pepper flavor” is very popular with consumers, creating new growth points for future performance.By product, fresh poultry revenue was 19.100 million, accounting for 78.4%, contributing the main income, followed by vegetables 2.500 million, accounting for 10.4%.In terms of regions, Central China, Eastern China, and Southern China accounted for a relatively high percentage of income, which were 26.7%, 25.4%, 18.2%, there is still room for development in the northwest. Expense rates have steadily declined, and net interest rates have hit record highs.The net profit attributable to the mother increased by 30 in Q2.8%, growth accelerated; net margin was 16.1%, a new high since 2014.1) The gross profit margin dropped slightly.Q2 gross profit margin was 35.0%, down by 1 every year.4 points, a quarter-on-quarter improvement, due to the decline in the purchase price of some ducks in 1Q19, but the price of duck necks rose slightly, coupled with the increase in prices of peppers, peppers and other accessories, partially hedged the fall in ducks ‘prices, resulting in 2Q19 gross profit marginsdecline.decline.18 years was the high point of duck deputy price. In 19 years, the increase in the price of feather ducks will speed up the farmers’ replenishment, eventually leading to an increase in the supply of duck deputies. Under the condition of stable demand, the prices of duck deputies are expected to fall, and the pressure of the company’s raw material costs will rise.Somewhat relieved.2) The cost rate has declined steadily.Expenses for Q2 are 15.0%, down with 0.7pct, of which sales cost is 9.0%, basically the same as the same period last year; considering the internal R & D expenses, the management expenses are reduced by 5.2%, down by 1.4pct, mainly due to a significant decline in depreciation.3) Investment income increased.The Q2 company achieved a net investment income of 14 million, mainly because the participating company, Sefia, benefited from the increase in duck prices, and the expansion of He Lao Noodle stores, which improved profitability. 杭州夜网论坛 Nuggets overseas markets, earnings continue to improve expected.The company’s stores in Hong Kong and Singapore saw considerable growth, with revenue reaching 0 in 1H19.The company has established a subsidiary in Japan for USD 300 million to accelerate the expansion of overseas business and is expected to become a new growth point.According to the company’s strategy, Juwei Duck Neck stores maintained a high net increase of 800-1200 stores, accelerated the development of high-potential energy stores, and promoted the online and offline integration and development, and the revenue flexibility will continue to increase.In 19 years, the company began to launch a new brand “Jiaojiayouwei”. The store opening has been effective from the region to the country, and the speed of opening stores will be accelerated in the future.In addition, 苏州桑拿网 the company has participated in a number of food chain and catering projects, and it is expected that brand fission will occur when the project matures.In the long run, the company is expected to maintain a stable performance growth rate. Earnings forecasts and investment advice.As a leader in leisure halogen products, the channel, production capacity and scale advantages are obvious. The expansion of stores and endogenous growth will increase the company’s performance, and new categories are steadily advancing, which is expected to become a new growth point.We expect the company’s 19-21 operating income growth to be 17.3% / 15.0% / 13.0%; net profit growth is 23.2% / 20.3% / 18.8%; EPS is 1.38/1.65/1.97 yuan, corresponding to 29/24 / 20X PE, maintaining the “recommended” level. Risk reminders: pressure on duck deputy prices, store opening speed is slower than expected, food safety issues.