The National Day holiday is approaching and the policies continue to blow warm wind, the catering sector rebounded sharply a few days ago.
According to Zhitong Finance APP, on September 26 and 27, the catering sector of the Hong Kong stock market rose strongly for two consecutive days, recording increases of 4.92% and 5.19% respectively. At the same time, stocks, , have also risen in the past two days, such as Jiu Mao Jiu (09922), which rose by 6.58% and 6.42% respectively in the two days, crossing the 10-day and 20-day lines.
As we all know, due to the sporadic outbreak of the epidemic, the situation in the catering industry in the first half of this year was not optimistic: According to National Bureau of Statistics data, the national catering revenue in the first half of the year was 2004 billion yuan, a year-on-year decrease of 7.7%; the catering revenue above the limit was 487.9 billion yuan, a year-on-year decrease of 7.8%.
Against this background, the development trend of Jiu Mao Jiu, which once relied on Taier sauerkraut fish, also showed signs of fatigue - Taier's store expansion speed has slowed down, the rate of table turnover has decreased, and other brands have lost their youth.
Now, with the release of consumption promotion policies in many places and the National Day holiday approaching, the fire of recovery in the catering sector has been rekindled. Among them, Dongwu Securities bluntly stated that the marginal improvement of consumption expected income and the reduction of costs and expenses brought about by relief and support policies will have a significant positive impact on the performance of industries such as catering. Analysts said that as the Mid-Autumn Festival and National Day holidays approach, coupled with the optimization and improvement of policies, residents' consumption demand may be released in a concentrated manner.
But who would have thought that this growth fire has not been burning for long. The day before the National Day holiday (September 30), Jiu Maojiu's stock price opened low and fell, falling more than 15% during the session. As of press time, its stock price fell 12.61% to HK$14.14, smoothing out the gains in the previous two days.
(Source: Futu)
The reason why Jiumaojiu's stock price plummeted was that the company plans to spend 1.1 billion yuan to acquire 26% of the equity of the Guangzhou Guojin Tiandi Commercial and Office Development Project located in Tianhe District, Guangzhou. Specifically, on September 29, Jiu Mao Jiu announced that it would acquire 26% of the equity of the Guangzhou Guojin Tiandi Commercial and Office Development Project in Tianhe District, Guangzhou from an independent third party, Zhongshan Bicui. Calculated at the unit price of RMB 33,012 per square meter, the maximum cash consideration is RMB 1.1 billion, which will be paid with internal resources.
Catering companies are planning property business, and the outside world is really a bit confused about Jiu Maojiu's move. So, under multiple layouts, can Jiu Mao Jiu really rekindle the fire of growth?
main brand growth is weak, and revenue and net profit both declined in the first half of the year
"Only by knowing the cause can you understand the result." Through Jiu Mao Jiu's financial report, it is not difficult to find that Jiu Mao Jiu's downward trend has actually been around for a long time.
According to Jiu Maojiu's semi-annual report, due to the impact of the epidemic, Jiu Maojiu's revenue and net profit both fell in the first half of this year. During the period, the company achieved revenue of 1.899 billion yuan, a year-on-year decrease of 6.1%; and achieved net profit attributable to shareholders of RMB 57.7 million, a year-on-year decrease of 69%. In addition, as of June, the total number of stores was 475, including 384 in Taier 2, with a net increase of 34 in the first half of the year, 77 in Jiumaojiu Northwest cuisine and 11 in Cowardly Hotpot.
Specifically, the lack of dine-in caused by the epidemic is the main reason for the decline in Jiumaojiu's revenue. In the first half of this year, epidemics occurred in many provinces in China, especially in Shenzhen, Shanghai, Beijing and other cities. In addition, these cities are the "main bases" of Taier Stores. Affected by the lockdown measures, more than 60% of restaurants in Jiu Mao Jiu experienced suspension or restrictions on dine-in services at different times in the first half of the year, with an average duration of about 32 days, resulting in an income loss of about 591 million yuan.
points, the revenue and turnover rate of Jiumaojiu's two major brands, "Tai Er" and "Jiu Maojiu", both declined to varying degrees.
In the first half of this year, in terms of revenue, the two major brands Tai Er and Jiu Mao Jiu achieved revenue of 1.481 billion yuan and 312 billion yuan, a year-on-year decrease of 7.4% and 17.9% respectively, accounting for 78.0% and 16.4% of the company's revenue respectively. In terms of the table turnover rate, the turnover rate of Jiu Mao Jiu and Tai Er in the first half of the year was 1.8 times/day and 2.9 times/day respectively, and 1.8 times/day in the same period last year and 3.7 times/day, mainly due to the significant reduction in customer flow in the business district caused by the epidemic.
(Data source: Jiu Mao Jiu Financial Report)
If you look at the timeline a little longer, these two "new and old" main brands of Jiu Mao Jiu seem to have gradually shown a downward trend.
takes the "Jiu Mao Jiu" brand. As the former main brand of Jiu Mao Jiu, the brand has begun to "downhill" since 2018. According to financial report data, the number of Northwest Restaurants in Jiu Mao Jiu has increased from 128 in 2016 to 147 in 2018. After that, the number of Northwest Restaurants in Jiu Mao Jiu has begun to decline continuously, and has dropped to 77 in the first half of this year.
With the significant shrinkage of stores, the Jiumaojiu brand is no longer regarded as the company's "main brand", and its revenue share has shrunk to 16.4%. Although the company said that the contraction of Jiu Mao Jiu was an optimization and adjustment move by the company, it is not difficult to see from the gradual decline in revenue contribution that this brand is weak in growth.
Look at the "Tai Er" brand again. With its efficient and replicable characteristics, the brand has been running wildly in recent years and has become the main brand of Jiumao Jiuxin, with revenue accounting for 78% in the first half of this year. Having said that, judging from the brand's gradual decline in turnover rate, the attractiveness of this product is also gradually declining - according to financial report data, from 2018 to 2021, its turnover rate was 4.9, 4.8, 3.8 and 3.4 respectively, revealing signs of fatigue in growth.
It should be noted that the decline in the turnover rate of Taier brand is not only the impact of the epidemic, but the increasingly fierce market environment has invisibly further exacerbated the growth pressure of the brand. According to Zhitong Finance APP, since the entry threshold for sauerkraut fish track is not high, and because of its replicable development characteristics, more and more entrants have entered in recent years (such as Jiang Yuer, Yu Niu and other brands). Tianyancha data disclosed that as of now, there are 27,000 sauerkraut-related companies in my country.
Based on the above, Jiu Mao Jiu's performance has shown a "decline" in recent years. In addition to the impact of the epidemic, it is also related to the gradual decline of the two major brands of Jiu Mao Jiu.
New brands are difficult to take the "best" and when will the growth vitality be revitalized?
Like many catering companies, when the main brand growth is weak, Jiu Mao Jiu also launched a brand called "Multi-brand development".
In 2003, Guan Yihong, who had opened a noodle restaurant in Haikou, came to Guangzhou and opened a "Shanxi Old Noodle Restaurant". Two years later, the "Shanxi Old Noodle Restaurant" was renamed "Jiu Mao Jiu", which also focused on Northwest cuisine. At that time, the company had and only had the main brand "Jiu Mao Jiu". In 2015, Jiu Mao Jiu began to develop a sub-card and played a sub-card called "Taier Laotanzi Pickled Fish Restaurant". Who would have thought that after just 5 years, the "sub-card" became the "main card", and Tai Er surpassed Jiu Mao Jiu and became the company's number one brand.
From Tai Er who was running all the way, Jiu Mao Jiu obviously also greatly tasted the growth sweetness of the "second curve". As a result, the company has launched a multi-brand development strategy. So far, through the continuous launch of new brands, Jiumao Jiu Group has developed from an
Northwest Noodle Restaurant to a catering group with Chinese catering chain operations as the core. Its catering brands include Jiumao Jiu, Tai Er, Shuang Chongqing Hot Pot Factory, Lai Meishan Jijiu Grilled Fish, Uncle Na Wei is a Chef, etc.
But at present, the new brands of Jiu Mao Jiu have not seem to have successfully copied the growth route of "Tai Er".
As of the end of June, the revenue contribution of new brands such as Shuang Hotpot and Lai Meili accounted for 5.3%, which was less than a fraction of Tai Er, and it was not much.
Take the new brand "Shuang Hotpot" that has the most hope of replicating the "Tai Er" model. The Shuang brand was launched in 2019. It previously mainly operated cold pot schurro (which was terminated in November 2021), and later transformed into Chongqing spicy hotpot in 2020. Although Shuang Hotpot continues the style of Taier sauerkraut fish, whether it is the creative decoration style, the store "rules", or the way to focus on catering single categories and dishes SKU, you can find the linkage between the two.
Although hot pot is growing rapidly in the first half of 2022, revenue increased by 366.2% year-on-year to 82 million yuan, and the turnover rate increased from 2.2 times/day in the same period last year to 2.4 times/day, in terms of revenue scale, it is still difficult to take the lead in growth, and revenue accounts for only 4.32% of total revenue.
Compared with brands like Coward Hotpot, some new brands have even developed to the point where they have been abandoned halfway. For example, after Jiumaojiu Group sold the "2 eggs" brand in June 2022, 7 "2 egg pancakes " self-operated restaurants and 15 "2 egg pancakes" franchise restaurants have also been removed from the company's restaurant network.
At the same time, in order to vigorously promote new brands, Jiu Mao Jiu also spent a lot of manpower and material resources, which further eroded the company's profit margin.
It is reported that despite the interference of the epidemic, Jiu Mao Jiu still did not give up on the plan to expand Taier Hesong Hotpot's store in the first half of the year.
Due to the expansion of the restaurant network, employee costs and asset depreciation have also increased further - during the reporting period, employee costs reached 544 million yuan, an increase of 7.4% year-on-year. The increase in restaurant decoration expenditure and procurement of kitchens and other equipment also led to the depreciation and amortization of other assets reaching RMB 93.5 million, an increase of 32.1% year-on-year. In addition, in order to promote, Jiu Maojiu's marketing and promotion expenses also increased: advertising expenses increased by 38.8% year-on-year to 23.3 million yuan.
Nowadays, when the main brand growth is weak and new brands are in short supply, Jiu Mao Jiu is still focusing on the former "fat meat" of the property industry. Let's not discuss the difficulty of cross-border layout of new businesses for the time being. As we all know, due to the downward cycle of real estate industry, the property industry is no longer the prosperous moment of rising in 2020. At this time, it is inevitable that it is "thankless" to enter the market.
About all the above, it is not difficult to see that the decline in Jiu Maojiu's performance is caused by the "internal and external resonance". Although the current trend of consumption recovery is gradually emerging, and Jiu Maojiu's external growth environment is improving, from a long-term perspective, the most critical reason for rekindling the fire of growth is itself, after all, "the blacksmith still needs to be strong." As for this, the market seems to have realized something. The sharp drop in stock prices on September 30 may be the true expectation of investors in the secondary market.
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