Juewei Food (603517) 2019 Quarterly Review: Opening Stores Still Accelerating and Stabilizing

Juewei Food (603517) 2019 Quarterly Review: Opening Stores Still Accelerating and Stabilizing
Matters: The company released the first quarter report of 2019 and achieved operating 西安耍耍网 income11.500 million, an increase of 19.6%, net profit attributable to mother 1.800 million, an increase of 20.4%, deducted non-net profit1.800 million, an increase of 21.2%, achieving a budget benefit of 0.44 yuan. Q1 results were in line with expectations.Q1 company revenue increased by 19.6%, slightly higher than market expectations.The gross profit margin was 33.3%, down by 1.1pct, period cost cost 13.0%, down with 0.3pct, net profit increased by 20.4%, in line with market expectations. Q1 speeded up the opening of the store, and “Jiaojiao” made a new income.Q1 income increased by 19.6%, slightly exceeding market expectations.The company achieved high growth in the first quarter, with a low base factor, but more from: 1) The speed of opening stores has accelerated significantly. We expect a net increase of about 250 stores in the first quarter, which will create a new high since the past five quarters and store stockThe total number is 10100+; 2) Benefiting from store upgrades, the same-store revenue growth rate is stable at 3% -5%; 3) New categories of “pepper flavor” are popular with consumers, and 20+ stores are expected to open in Q1.In the initial period, about 200 stores were opened, creating a new growth point in performance.In terms of products, fresh poultry revenue was 9.0 ppm, accounting for 80%, contributes the main income, followed by vegetables1.100 million, accounting for 10%. In terms of regions, Central China, Eastern China, and Southern China accounted for a relatively high income, which were 27.1%, 17.0%, 25.0%, 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 20 in Q1.4%, maintaining stable growth; net interest rate is 15.7%, a new high since 2014.1) The gross profit margin dropped slightly.Q1 gross profit margin was 33.3%, down by 1 every year.1pct, mainly due to the rise of duck intestines, duck tongues and other deputy prices in the first three quarters of 18 years, which declined in the fourth quarter. A small portion of 1Q19 used raw materials purchased in 3Q18. At the same time, prices of auxiliary materials such as pepper increased, and some hedged 4Q18 The fall of duck deputy prices led to a decline in gross profit margin in 1Q19.In 19 years, the price of duck deputy purchases has been relatively reduced, and the pressure on raw material costs has eased. 2) The cost rate has declined steadily.Expenses during Q113.0%, down with 0.3pct, of which selling expenses cost 7.3%, basically the same as the same period last year; considering internal R & D expenses, administrative expenses 56%, down by 0.4pct. Maintaining a steady store opening, continued improvement in profitability can be expected.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, the company has participated in multiple food chain and catering projects. When the project matures, it is expected to form a brand fission and form a new growth point.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 to be 50.23/57.26/64.71 ppm with a growth rate of 15.0% / 14.0% / 13.0%; net profit is 7.97/9.62/11.37 trillion, with a growth rate of 24.4% / 20.8% / 18.1%; EPS is 1.94/2.35/2.77 yuan, corresponding PE is 24/20 / 17X, maintaining the “recommended” level. Risk reminders: pressure on duck deputy prices, store opening speed is slower than expected, food safety issues.