20220617-招银国际-九毛九-09922.HK-SSS_rebounds_in_May_and_costs_control_pay_off_9页

CMB International Global Markets | Equity Research | Company Update: Jiumaojiu (9922 HK)

核心内容

CMB International Global Markets maintains a BUY rating for Jiumaojiu (9922 HK) and raises the target price to HK$21.30, based on a 35x FY23E P/E. The stock is currently trading at HK$17.10, which is 21.7% below the target price.

The report highlights the rebound in Same Store Sales (SSS) in May 2022 compared to April 2022 and the recovery trend in the second half of 2022, despite the challenges posed by the recent COVID-19 outbreaks and lockdowns. The recovery rates for Tai Er and Jiumaojiu (JMJ) compared to 2019 improved in May 2022, with Tai Er at 63% and JMJ at 71%. The report also mentions that Tai Er's performance was more affected due to its store locations in Shanghai and Beijing.

The company is expected to maintain profitability in the first half of 2022 due to cost control and operational efficiency, with a projected NP margin of 5.2% for 1H22E, lower than the 7.1% in 2H21. The net profit estimates for FY22E and FY23E were cut by 29% and 5%, respectively, while the FY24E net profit was raised by 4%, to factor in the impact of the pandemic and cost savings.

主要观点

• SSS Recovery:

  • In May 2022, SSS for Tai Er and JMJ improved compared to April 2022 and March 2022.
  • Tai Er's SSS recovery rate (vs 2019) was 63%, while JMJ's was 71%.
  • The recovery trend in 2H22E is expected to be slightly better than 2H21 but weaker than 2H20 due to social distancing and economic growth.

• Store Opening:

  • Store openings slowed in 1H22E due to travel restrictions, with only 20-30 new stores expected.
  • The full year target remains unchanged.

• Cost Management:

  • The company is benefiting from cost savings and efficiency gains, including self-raised bass which is 5-10% cheaper than sourcing outside.
  • Staff costs per restaurant decreased to 27 in Dec 2021, and while there is pressure due to no layoffs, minimum wages are being paid in affected areas.
  • Rental costs are manageable due to minimal base rent and lower tier cities.

• Earnings Forecast:

  • The revenue for FY22E is RMB 5,031 million, with FY23E at RMB 7,105 million and FY24E at RMB 9,179 million.
  • Net profit for FY22E is RMB 380 million, FY23E at RMB 732 million, and FY24E at RMB 1,011 million.
  • EPS is expected to be RMB 0.262 for FY22E, RMB 0.504 for FY23E, and RMB 0.695 for FY24E.

关键信息

• P/E Ratio:

  • Current P/E is 28.1x for FY23E, while the 5-year average is 50x.
  • The P/B ratio is 4.4x for FY23E, with a 5-year average of 5.3x.

• Share Performance:

  • Over the past 12 months, the stock has underperformed, with a -37.6% return.
  • The 3-month return is 51.9%, and the 6-month return is 28.1%.

• Shareholding Structure:

  • Mr. Guan Yi Hong holds 40.66% of the shares.
  • Free Float is 45.31%.

• Valuation:

  • The target price for Jiumaojiu is HK$21.30, compared to the current price of HK$17.10.
  • The NP margin is expected to be 9.2% in 2H22E, up from 7.1% in 2H21.
  • The EBIT margin is projected to be 12.4% for FY22E, 16.3% for FY23E, and 17.2% for FY24E.

• Peer Comparison:

  • Jiumaojiu's P/E is 28.1x for FY23E, compared to an average of 44.3x for other Greater China Catering companies.
  • The P/B ratio is 4.4x, compared to an average of 3.3x for the sector.
  • The ROE is 15.8% for FY23E, compared to an average of 9.4% for the sector.

总结

Jiumaojiu is showing signs of recovery in its SSS performance, with a rebound in May 2022 and improvement in 2H22E. The company is expected to maintain profitability due to cost control and operational efficiency. Despite the slow store openings in 1H22E, the full year target remains unchanged. The target price has been raised to HK$21.30, reflecting the company's resilience and long-term potential. The valuation is lower than the 5-year average, but the earnings forecast shows positive growth. The peer comparison highlights that Jiumaojiu is undervalued relative to the sector.