Guangzhou Restaurant (603043): Product Power and Brand Power Enhancement Significantly Advance Costs and Provide Guarantee for Follow-up Development

Guangzhou Restaurant (603043): Product Power and Brand Power Enhancement Significantly Advance Costs and Provide Guarantee for Follow-up Development

The company released its 2018 annual report on April 24, 2019, with an initial operating income of 25 in 2018.

37 ppm, an increase of 15 in ten years.

89%; net profit attributable to mother 3.

84 ppm, an increase of 12 in ten years.

79%; net profit after deduction is 36.

870,000 yuan, an increase of 11 in ten years.

45%; corresponding to EPS0.

95 yuan; expected average ROE21.


The 2019 first quarter report released on the same day showed that the company’s operating income in the first quarter of 20195.

33 ppm, an increase of 19 years.

79%; net profit attributable to mother is 45.51 million yuan, a year-on-year increase of 17.

93%, net profit after deduction is 41.87 million yuan, an annual increase of 10.

77%; corresponding to EPS0.

11 yuan, expected average ROE2.


Revenue growth is due to the dual impact of capacity release and unit price increase in the food manufacturing sector. Product power and brand power are evident.

For the whole of 2018, the company’s food manufacturing business realized revenue18.

92 ppm, an 18-year increase.

59%, an increase of 7.7% over 2017

3 single; catering business realized income 6.

10,000 yuan, an increase of 7 in ten years.

46%, a growth rate of 20 compared to 2017.

73% is very obvious.

Among the three sub-segments under the food manufacturing business, the mooncake segment has an income of 10.

38 ppm, an increase of 15 in ten years.

67%; income from the quick-freezing sector4.

100,000 yuan, an increase of 29 in ten years.

86%; income from other (crisp and waxy) plates4.

43 ppm, an increase of 15 in ten years.


The growth of relevant sub-segments comes from the increase in sales volume brought by the gradual release of the company’s productivity, and the replacement comes from the increase in the average unit price of the product: 1) The sales of the mooncake sub-segment in 20181.

15 for the first time, growing by 9 per year.

92%, the unit price of 90.

2 yuan / kg, an increase of 5 in ten years.

20%; 2) Quick frozen sub-segment sales in 2018 2.

02 for the first time, growing 20 annually.
5%, sales unit price 20.
5 yuan / kg, an increase of 10 in ten years.


Taken together, the company’s sales growth in 2018 was slightly worse than we expected, but at the same time the average ex-factory price increase of major products is expected to reflect the company’s continuous product upgrade capabilities and brand influence.

The growth potential of the sector is strong, helping the revenue growth return to the fast lane.

From 1Q2018 to 1Q2019, the company’s single quarter revenue exceeded the growth rate of 15 respectively.

47%, 14.

73%, 21.

89%, 4.

86% and 19.


Among them, 4Q2018 was affected by the misalignment of mooncake business income, and the growth rate was significantly shortened.

In terms of comparable business caliber, 2H2018’s revenue was 17.

460,000 yuan, an increase of 16 in ten years.


In the first quarter of 2019, the company’s single-quarter revenue grew even higher every year, and achieved 1.

78% revenue growth from the previous month, the first time in recent history, shows the continued expansion of the total scale of comparable business.

1Q company’s main income consists of catering, quick-freezing and other (bread cakes and waxy flavors). Among them, quick-freezing is a sector that the company has vigorously cultivated in recent years. We judge to change the company’s March 2019 through the change of investment projects. The 重庆耍耍网 capacity of this sector is released.Speed up and speed up, alleviate the current situation of oversupply. At the same time, the company is also actively nurturing the baking and pastry plate, seeking to replicate the successful path of quick-freezing, and the plate company can expand production, subject to less capacity constraints.

In the end, the company has raised a total of 2 investment projects.

Among the 1-calorie capacity, 7,300 tons of quick-freezing and central catering capacity have been completed, and 13,960 tons of capacity have yet to be replenished, of which moon cake, fillings, and wax flavor production capacity do not exceed 2000 tons / year, 6000 tons / year and 2000 tons / year respectively, and the remaining isQuick-freezing capacity.

All projects are expected to reach capacity in December 2020, and 北京夜网 capacity expansion is expected to bring long-term growth space.

Regarding the catering sector, the company opened 2 new stores and closed 1 in 2018. In 2019, the company has already known that the number of stores has reached 2; of which, the “Star City” has been opened in March, and the “Guangzhou Restaurant” brand store in Shenzhen has been in early stagesPreliminary work has been completed.

In addition, the company purchased two Guangzhou restaurant stores, namely Huadi Avenue and Nansha Store.

We judge that the increase in the number of catering stores is expected to boost the performance of the catering sector and further boost the company’s brand influence.

The cross-region development has achieved initial results, and the omni-channel sales system is accelerating.

Before listing in 2016, the company’s popularity outside Guangdong Province was not high, and the income outside the province was only 1.

800 million scale.

In 2018, the operating income outside Guangdong Province reached 3.

5.7 billion, an increase of 54 in ten years.

44%, compared with 28 in the same period in 2017.

33% has accelerated significantly; the proportion of income has increased from 11% in 2017 to 14%, and cross-regional development has achieved initial results.

The report summarizes that the company increased its investment in Internet marketing, effectively integrated online and offline resources, focused on the development of distributors outside the province, optimized the structure of distribution products outside the province, increased sales coverage in eastern and central China, and promoted sales outside the provinceRapid growth.

The company recorded distribution revenue in 201813.

29 ppm, an increase of 20 in ten years.

25%, faster growth than direct sales; meanwhile, online sales revenue increased by 48.

09% to 3.

10 trillion, maintaining rapid growth.

According to the company’s business plan, in 2019, the company will further take “Guangzhou Restaurant” and “Likoufu” as its core brands to set up production bases in different places, arrange brand-operated stores across regions, and vigorously cover key cities in the Guangdong-Hong Kong-Macao Greater Bay Area.

Expand the promotion of cross-regional terminal markets in an all-round way by expanding outside the province, expand the brand influence and market share, and lay the foundation for the intensive release period of production capacity.
The gross profit margin increased significantly.

The company’s overall gross profit margin in 2018 was 54.
66%, an increase of 1 per year.

51 averages, broken down quarterly, gross margins for the first quarter to the first quarter of 2018 were 47.

68% / 47.

81% / 59.

58% / 53.

61% / 47.

14%, with a ten-year change of +1.

28 / + 0.

56 / + 0.

72 / + 3.

16 / -0.

54 averages. In the first quarter of 2019, the gross profit margin declined slightly due to the increase in raw material costs, but the overall is still at a high level.

In terms of different products, the gross profit margins of the 10-month mooncake / quick frozen / other / food sector in 2018 were 63.

22% / 36.

92% / 38.

07% / 62.

71%, ten years change +1.

70 / + 4.

04 / + 2.

31 / + 0.

The 85 averages all achieved varying degrees of growth.

The increase in gross profit margin was mainly due to 1) moon cakes, quick-freezing and other product price increases, and 2) scale effects due to increased production capacity.

In terms of regions, the gross profit margins within Guangdong Province / outside Guangdong Province / overseas were 54.

98% / 51.

35% / 32.

77%, ten-year change +0.

28 / + 12.

32 / + 2.

59 units, the increase in gross profit margin outside the province indicates that costs have been greatly reduced, and it also reflects that the expansion in other places has already achieved initial results.

Period expenses first affect profitability.

At the beginning of 2018 and the first quarter of 2019, the company’s net profit margin was 15 respectively.

13% and 8.

55%, ten years change -0.

43 / -0.

Of the 13 single ones, we judge that the gradual increase is mainly due to the increase in the company’s expense ratio during the period.

At the beginning of 2018 and the first quarter of 2019, the sales expense ratio was 25.

93% / 25.

37%, a ten-year change +0.
78 / -1.

18 units; the management expense ratio is 9.
09% / 9.

86%, a ten-year change +0.

79 / -0.

52 units; preliminary R & D expenses in 2018 were 48.47 million, an annual increase of 158%, and an expense ratio of 1.

91%, an increase of 1 per year.

05 shares per share, R & D expenses in the first quarter of 20191.

38%, an increase of 0 every year.

68 units.

The increase in R & D expenses was mainly due to the company’s advancement in the construction of the R & F Technology R & D Center in the fund-raising investment project, which was ahead of time for the new plant’s R & D layout, which is conducive to the cultivation of new products such as moon cakes and quick freezing in the medium and long term.

The overall period expense ratio was 36.

03% / 35.

93%, ten years +2.

42 / + 0.

44 units.

Earnings forecast and grade: We predict the company’s operating income for 2019-2021 will be 31.



7.4 billion, with growth rates of 23 respectively.

91% / 18.

95% / 24.

99%; net profit attributable to mothers is 4.



41 trillion, the growth rate was 16.

83% / 14.

93% / 24.

27%; Diluted EPS based on the company’s current share capital are 1.

11 yuan / 1.

28 yuan / 1.

59 yuan; corresponding to the closing price of PE on April 25 were 26x, 23x and 18x.

Risk factors: 1) Trans-provincial operation needs to be tested; 2) Labor costs are intensive and the automation rate needs to be improved; 3) The introduction of restrictions on catering consumption will hurt the company: 4) Employee incentive mechanisms need to be strengthened; 5) Food safety, especially in AfricaRisks related to swine fever; 6) The project’s production is below expectations; 7) The macroeconomic downturn reduces consumption expectations.