Juewei Food (603517) 光大证券·2024-05-06 04:08Investment Rating - The report maintains a "Buy" rating for the company [4][3]. Core Views - The company achieved a revenue of 7.261 billion yuan in 2023, representing a year-on-year growth of 9.6%, and a net profit of 401 million yuan, up 54.5% year-on-year [1]. - The company is experiencing a recovery in single-store revenue, with expectations for the reform of its franchise system to enhance long-term growth potential [3][8]. - Cost pressures are easing, leading to a significant improvement in profit margins, with a net profit margin of 4.37% in 2023, up 1.44 percentage points year-on-year [2]. Summary by Sections Financial Performance - In Q4 2023 and Q1 2024, the company reported revenues of 1.630 billion yuan and 1.695 billion yuan, respectively, with year-on-year changes of +8.5% and -7.0% [1]. - The gross profit margin for 2023 was 24.77%, a decrease of 0.80 percentage points year-on-year, but improved to 26.90% in Q4 2023 and 30.03% in Q1 2024 [2]. - The company’s net profit for Q1 2024 was 156 million yuan, showing a year-on-year increase of 15.7% [1]. Store Operations - The company opened a net of 874 new stores in 2023, bringing the total to 15,950, a 6% increase year-on-year, although there was a net decrease of 212 stores in the second half of the year due to a slowdown in consumer spending [7]. - The revenue from fresh products grew by 6% year-on-year, indicating that single-store revenue has stabilized [7]. Franchise System - The company is focusing on the health of its franchise system by reducing the pace of new store openings and optimizing its franchise model [8]. - The introduction of new franchisees with better backgrounds aims to enhance the overall quality of the franchise system, setting a foundation for sustainable growth [8]. Profit Forecast and Valuation - The profit forecasts for 2024 and 2025 have been adjusted downwards to 840 million yuan and 982 million yuan, respectively, reflecting a 14% and 24% reduction from previous estimates [3]. - The current stock price corresponds to a PE ratio of 15 for 2024, 13 for 2025, and 11 for 2026, indicating a favorable valuation for a leading player in the casual snack market [3].