Juewei Food (603517) Annual Report Review: Store Opening Speed Picks Up Same Store Steady Growth Brand Extension Worth Looking Forward

Juewei Food (603517) Annual Report Review: Store Opening Speed Picks Up Same Store Steady Growth Brand Extension Worth Looking Forward
Event: The company achieved operating income in 201843.68 ppm, an increase of 13 in ten years.45%; net profit attributable to mother 6.410,000 yuan, an increase of 27 in ten years.69%.Among them, 2018Q4 achieved operating income11.2 billion, an annual increase of 14.71%; net profit attributable to mothers1.53 ppm, an increase of 23 in ten years.60%. The opening of stores in 2018H2 accelerated, and single-store revenue increased.At the end of 2019, the company established a total of 9,915 stores across the country, an increase of 862 each year.In half a year, the net increase of stores in 2017H1 / 2017H2 / 2018H1 / 2018H2 was 686/443/406/456 respectively. Under the circumstances that the net increase in the number of stores in 2018H1 allowed, the number of net stores in 2018H2 increased by 13.Among them, there was a net increase of 205 stores during the off-season of 2018Q4, accounting for 24% of the majority of net openings, and the trend of acceleration of store opening was obvious.In 2018, the average sales revenue of halogenated products increased by 1 every year.56% to 44.40,000 yuan, in the case of opening stores in 2018 concentrated in the second half of the year is really rare.In 2018, the company will increase the revenue of single stores first. By actively expanding operating capabilities, improving product performance, integrating terminal resources, and increasing the proportion of high-potential stores, it has achieved a healthy growth in single store revenue. The main business grew steadily, and the increase in raw material costs put pressure on gross profit margins.In 2018, the company’s halogen products revenue was 42.13 ppm, an increase of 13 in ten years.47%, gross margin decreased by 1.30 pct to 33.51%, mainly due to the rise in the price of duck by-products in 2018.The income of poultry / livestock / vegetables / other fresh products was +11 respectively.0% /-24.1% / + 15.7% / + 55.2%, sales are +3.0% /-31.6% / + 8.2% / + 14.3%.Benefiting from the company’s price increase at the end of 2017, the ton prices of poultry / livestock / vegetables / other fresh products were +7 respectively.7% / + 11.0% / + 6.9% / + 35.8%, but the rising cost of raw materials (especially duck pair) leads to a cost of +11 per ton.4% / + 4.0% / + 1.1% / + 32.4%, gross profit margins are -2.1 / + 5.7 / + 3.8 / + 1.9 pct.The growth rate of raw materials in inventory at the end of 2018 increased by 47%, which was mainly due to the fall in the prices of duck sub-frozen products in the fourth quarter of 2018. The company’s strategic stocking increased, which is expected to ease the cost pressure in early 2019.Benefiting from overseas expansion and new Xinjiang markets, overseas and Northwest China revenues increased by 319.06% and 78.65%, other regions benefited from first- and second-line store encryption and third- and fourth-line channel sinking revenue maintained steady growth, and Southwest / Central China / South China / East China / North China revenue increased by 9.5% / 12.4% / 17.0% / 11.8% / 7.4%. Falling expense ratios released profit elasticity, and convertible bond projects strengthened the supply chain.In 2018, the company’s sales / management / R & D expense ratios were -2.84 / -0.73 / + 0.05.The decrease in the sales expense ratio was mainly due to the 74% reduction in advertising expenses. The cost was low in 2017, and the company expanded its brand promotion.In early 2019, the company issued convertible bonds to raise funds for the construction of four production bases in Tianjin, Jiangsu, Wuhan, and Hainan, as well as the construction of a storage center in Shandong. It plans to build 79,300 tons of production capacity and 30,000 tons of raw material storage capacity.The company builds its own high-standard, automated factories in core areas such as Beijing, Tianjin, Hebei, and the Yangtze River Delta to improve the supply capacity and product quality of the two major markets in North and East China.At the same time, the construction of the Shandong Rush Center can solve the storage problem of bulk raw materials after purchase, which will stabilize the fluctuation of raw material prices. Profit forecast: As a leader in leisure halogen products, Juewei uses management capabilities and supply chain advantages to establish channel barriers, and has ample room for sinking.In 2018, the company completed the trial of some delicious fresh products and peppers with some flavors in the market. In 2019, it is expected to enter the 上海夜网论坛 store expansion period and become a new growth point for the company.In addition, the company transitioned to a platform-type company by establishing a “gastronomy ecosystem”, focusing on training strategic franchisees. The top five customers’ revenue in 2018 increased by 0.32.We adjust our profit forecast and expect the company’s revenue to be 50 in 2019-2021.10, 56.86, 63.90 trillion, net profit attributable to mothers are 7 respectively.70, 9.09, 10.60 ppm, EPS is 1.88, 2.22, 2.59 yuan, corresponding to PE is 24 times, 20 times, 17 times, maintaining the “buy” level. Risk Warning: The price of raw materials has risen sharply; channel expansion has fallen short of expectations; food safety incidents