【行业研究报告】九毛九-1H22 Earnings Preview: Revenue and profit beat with post-pandemic recovery well underway

Jiumaojiupreannounced1H22revenueataboutRmb1.90bn(-6.1%YoY),
attributablenetprofitatnolessthanRmb55mn(-70.4%YoY),andadjusted
netprofitatnolessthanRmb76mn.Boththetopandthebottomlinebeat
expectations.Afterthepandemicsubsides,TaiEr’sSSSinJunrecovered
to86%ofthatinJun2021,showcasinganotableuptrend.TaiEr’sbrand
powerremainsstrong,andtheoperatingperformanceofSongHot-Pot
Factoryisimproving,leadingustobelieveitsplatform-baseddevelopment
isgraduallygainingmomentum.Wemaintainthe"BUY"rating.
▍Revenueandprofitwerebothbetterthanexpected.
TheCompany’s1H22earningspreannouncementputsits1H22revenueat
TheCompany’s1H22earningspreannouncementputsits1H22revenueat
aboutRmb1.9bn(-6.1%YoY),betterthanourforecastofRmb1.73bn,
attributablenetprofit(ANP)atnolessthanRmb55mn,againbetterthanour
forecastofRmb48mn.AnunrealizedexchangelossofRmb20mnwas
generatedintheprepaymenttotheaffiliates,whichisaone-timenon-cash
itemduetothedepreciationoftheRMBagainsttheHKDin1H22.Addingthat
back,theadjustednetprofitwillbenolessthanRmb76mn.In1H22,the
Companyopened35TaiEr(太二)storesand2Song(怂)Hot-PotFactory
stores,whichshowsasteadystoreexpansionandisinlinewithexpectations.
▍TaiEr’sbrandpowerremainsstrongandwillsupportthemedium-term
goalofopening1,000stores.
FromJantoJun2022,TaiEr'smonthlysame-storesales(SSS)recoveredto
88%/85%/60%/52%/61%/86%ofthelevelinthesameperiodof2021.TaiEr
storesarecurrentlyconcentratedinhigh-tiercities(thenumberofstoresin
tier-1andnewtier-1citiesaccountsfor60%,accordingtocateringdata
providerZhaimencanyan).Asaresult,theoperationofTaiErwasgreatly
affectedbytheregionalresurgenceofthepandemicin1H22,buttheSSS
recoveredsignificantlyafterwards(inJun).ThedatainNov2021showthat
60%/90%ofTaiErstoresrankfirst/topthreebysalesperunitareaamong
cateringbrandsinshoppingmalls,andtherepurchaserateisalsostable.We
believethatTaiErstillboastsimpressivebrandpotential.Thebrandisactively
boostingtheself-sufficiencyofcorerawmaterials,anditsoperatingefficiency
isstable.WeseehighvisibilityforTaiErtoopen1,000storesinthemedium
termandexpectastableprofitcontributionfromTaiErstores.
▍Multi-brandoperationslookpromising:Song(怂)andLaiMeili(赖美丽)
bothperformwell.
BytheendofJun,Songhad11storesintotal.Aftermorethanayearofmodel
polishing,thebrandhasbeenbasicallysetinstoneandisnowatthestageof
storeexpansionandthefineadjustmentofoperations.Itsoperating
performancehasshownanupwardtrend.InJun2022,thethirdstorein
Guangzhouwasopened,andthenumberoftablesforpeoplequeuingupin
linereachedmorethan2,000atabout5pmonthethirddayoftheopening
event.Theoperatingperformanceofstoresinothercitiesalsocontinuedto
improve.Basedonthis,theCompanychangeditsstoreopeningscheduleand
planstoopenfivemorestoresontopofthepreviousstoreopeningguidance.
LaiMeiliGrilledFishisatthestageofproductdesign.Atthebackend,the