Zhi Tong Cai Jing·2025-08-01 08:19Core Viewpoint - The restaurant industry experienced high prosperity from 2019 to 2022, but has faced declining demand and performance pressure in 2023, leading to a downward adjustment in valuations, currently around a PE of 20 times. Despite this, the long-term development logic remains solid, with leading companies actively adjusting strategies for growth, indicating potential for a rebound if performance exceeds expectations. Additionally, capital expenditures are expected to decline in 2024, improving free cash flow and shareholder returns [1]. Group 1: Industry Performance - The restaurant industry's revenue growth is expected to slow to low single digits from 2019 to 2024 due to weak consumer recovery, significantly impacting the demand for frozen food products. This has resulted in noticeable declines in the performance of listed companies in the sector, with no clear turning point in sight. Market sentiment regarding the long-term growth potential of leading companies is pessimistic, despite the irreversible trend towards food freezing and significant long-term growth opportunities [2]. - The industry has faced performance pressure due to a mismatch between supply and demand, exacerbated by aggressive expansion during optimistic market conditions in previous years. Increased competition from a fragmented market has led to greater promotional discounts and higher expenditure, resulting in a decline in capital return rates. However, capital expenditures are expected to decrease significantly in 2024, and the total number of employees in the sector has begun to stabilize, indicating an awareness of the supply-demand imbalance and a shift towards active adjustments [3]. Group 2: Company Strategies - Some companies within the sector are actively seeking solutions to break through current challenges by expanding product categories, launching new products, and exploring emerging channels for growth. For instance, Anjuke Foods (603345) has shown strong operational resilience and plans to emphasize product-driven growth by increasing new product launches and focusing on direct-to-consumer sales to enhance profit margins by 2025. Meanwhile, Qianwei Central Kitchen (001215) has been increasing its R&D and sales personnel, enhancing its channel capabilities in both large and small business segments, and is embracing new retail channels to drive growth in dish and baking categories [4]. Group 3: Investment Recommendations - Companies to watch include Anjuke Foods (603345.SH), Qianwei Central Kitchen (001215.SZ), Baoli Foods (603170.SH), and Weizhi Xiang (605089.SH) [5].