Juewei Food (603517) 2019 Third Quarterly Report Review: Performance continues to grow faster and steadily expands the gourmet ecosystem

Juewei Food (603517) 2019 Third Quarterly Report Review: Performance continues to grow faster and steadily expands the gourmet ecosystem
Matters: The company released the third quarter report of 2019, and the first three quarters achieved revenue of 38.8.6 billion yuan, an increase of 18.98%, net profit attributable to mother 6.1.4 billion, an increase of 26.06%.Single Q3 income 13.9.6 billion, an increase of 18.21%, net profit attributable to mother 2.1.8 billion, an increase of 26.54%, the performance continued to grow rapidly, in line with our expectations. Cash received for sales of goods in the first three quarters was 44.43 trillion, the same increase of 13.7%, net cash from operating activities is 8.64 trillion, an increase of 67.4%. Revenue maintained rapid growth, and the pace of opening and same-store operations was good.The company achieved revenue of 38 in 厦门夜网 the first three quarters.8.6 billion yuan, an increase of 18.98%, single Q3 income 13.9.6 billion, an increase of 18.21%, the growth rate continues to grow faster. It is expected that Q3 store opening and same-store growth will still maintain a good pace. It is expected that the goal of 800-1200 stores will be completed gradually.By region, in the first three quarters, Central China, East China, South China, Southwest China, North China, and Northwest China each achieved revenue of 10%.0.5 billion, 9.6.3 billion, 7.1.5 billion, 5.4.5 billion, 4.4.7 billion yuan, 6709.560,000 yuan, an increase of 18 respectively.30%, 14.57%, 29.99%, 16.71%, 13.98%, 11.11%, of which Central China and South China markets have grown rapidly.In terms of overseas business, the Singapore and Hong Kong markets achieved revenue of 5,739.250,000 yuan, an increase of 42.98%. Q3 gross margin improved significantly, and profitability improved.The company’s gross profit margin in the first three quarters was 34.70%, a decline of 0 every year.21pct, single Q3 gross margin is 35.52%, increase by 1 every year.60pcts, an increase of 0 from the previous month.49pct. The increase in gross profit margin is expected to come from the fall in raw material costs. A series of channel feedbacks have shown that costs such as duck necks have increased in the first half of the year.In terms of expense ratio, the company’s sales expenses subsidized in 19Q3.66%, increase by 1 every year.12%; management expense ratio 5.40%, down by 0.78pct.In summary, the company’s net profit for the first three quarters was 15.81%, an increase of 0 a year.89pct, Q3 net margin extension increased by 0.99pct to 15.38%, profitability has improved. Focus on the steady expansion of stores in the short-term, and the strategy of integrating the food ecosystem in the long-term is clear.In the short term, the company’s revenue growth is still driven by the steady expansion of stores. In recent years, it has opened stores at a speed of 800-1200 per year. At present, it has broken through 10,000 stores and the ceiling of the stores is far away.In the long run, the company has established a gourmet platform by relying on national stores, investing in projects such as lo-mei, light meals, condiments, and cold chain logistics, and relying on its supply chain and store management capabilities to build a gourmet ecosystem.In the future, under the scale effect of the store and the synergy effect of the platform, the company’s performance growth will be more important, and the scale advantage will steadily appear. Investment suggestion: As a leader in the halogen product industry, the company has obvious advantages in supply chain management and brand channels. At present, the store maintains a good pace of expansion, has good cost control, and expects stable growth in performance.In addition, the company began to deploy string business and supply chain service business, and actively invested in mergers and acquisitions to build a gourmet ecosystem. The overseas layout is also accelerating, and its mid-to-long-term growth highlights.We maintain our EPS forecast for 2019-2021 to 1.39/1.66/1.95 yuan, corresponding PE is 32/27/23 times, and maintain 12-month target price of 49 for the time being.8 yuan, corresponding to 30 times PE next year, maintaining the “strong push” level. Risk warning: raw material prices rise, store opening is less than expected, food safety risks, etc.