Jiumao92nd IPO: profit growth exceeds that of Haidilaos Taier stores

category:Finance
 Jiumao92nd IPO: profit growth exceeds that of Haidilaos Taier stores


Jiumaojiu group, which has many famous catering brands such as jiumaojiu and Taier pickled vegetables and fish, is expected to be listed on the Hong Kong Stock Exchange on January 15, 2020. Jiumaojiu expects to expand its stores such as Taier pickled fish and jiumaojiu to achieve stable growth. However, the competition in the catering market has always been fierce, and the popular categories such as pickled vegetables and fish are crowded with competitors. Whether the radical expansion strategy can work is still unknown.

As early as August 28 this year, jiumaojiu catering group submitted a prospectus to the Hong Kong stock exchange, intending to IPO the main board of Hong Kong. Prior to that, Jiu Maojiu had tried to apply for listing of a shares, but failed to do so. In 2016, Jiu Maojiu submitted an application for A-share listing to the CSRC. In 2018, due to the extension of the overall A-share review process and the uncertain listing schedule, Jiu Maojiu withdrew the A-share listing application.

Some analysts pointed out that the main reason for the failure of the impact on A-share is the excessive expansion of capital and the poor financial situation. This is because from 2013 to 2015, the net profit of 999 was 27.66 million yuan, 43.9 million yuan and 31.05 million yuan respectively, and the growth rate of net profit in 2014 and 2015 was 58.68% and - 29.26% respectively.

One of the reasons why mainland Chinese food companies are showing signs of IPO in succession is that the rapid growth of Chinas catering service market has increased the total market revenue from 2892.5 billion yuan in 2014 to 4271.6 billion yuan in 2018, with a compound annual growth rate of 10.2%. However, although there are more than 40 catering companies in Hong Kong stock market at present, the market value is generally small. Only Haidilao, xiabuxiabu and dule group have a market value of more than 10 billion. A-share catering companies, mainly Guangzhou Restaurant, Quanjude, St Cloud (formerly known as xiange Qing).

It is difficult for Chinese catering enterprises to go public, and they are all relatively late, and they are difficult to grow up. So far, this situation has not been changed. For a long time, there have been catering companies impacting IPO of A-share and Hong Kong stock, but many enterprises cant last. The main reason is that the ceiling of the catering industry is very low, the risk of market competition and industry fluctuation is large, and the audit of these enterprises to go public will be more severe. Relatively speaking, the capital market will prefer industries with higher threshold and more development prospects, such as high-tech and biomedicine. Lin Yuhua, an industry researcher at gronhui, told China times.

It is reported that jiumaojiu group was founded in 2005 and is positioned as a Chinese fast fashion catering brand. The founder and controlling shareholder of the group is Guan Yihong, who holds 61.4445% of the shares. Once the nine point nine is officially listed on the Hong Kong stock exchange, Guan Yihong will also soar in value.

Jiumaojiu operates 5 self owned brands, including 147 jiumaojiu restaurants which are mainly of Northwest cuisine, 98 Taier restaurants which are mainly of old jar pickled fish, 22 egg pancake restaurants, 1 counseling restaurant, 1 Chef Restaurant which is uncle Nawei, and 41 egg pancake restaurants which are under the franchise mode, totaling 269 restaurants.

At present, jiumaojiu and Taier are the main brands of jiumaojiu group, with a total revenue of over 98%. According to the prospectus, in the first half of 2019, the groups revenue was 1.237 billion, up 41.9% year on year; its profit was 102 million yuan, up 87.5% year on year; its revenue in 2016, 2017 and 2018 were 1.164 billion yuan, 1.469 billion yuan and 1.893 billion yuan respectively. According to frost Sullivan report, in 2018, jiumaojiu ranked No. 2 in Northwest Chinese restaurants, and Taier ranked No. 1 in all pickled fish restaurants in China.

In addition, the number of nine gross nine stores increased from 241 in 2018 to 297 in the first half of 2019, with a growth rate of up to 50%. Stores in South China market accounted for 78.1%. The customer unit price of jiumaojiu brand and Taier pickled fish increased from 53 yuan and 72 yuan in 2018 to 56 yuan and 75 yuan in the first half of 2019 respectively. In Lin Yuhuas view, the performance growth of jiumaojiu is very good, and the net profit growth of Haidilao, the leading catering company of Hong Kong stock, in the first half of 2019 was 40.9%.

But we need to look at this growth objectively. The companys profit in 2018 is lower than that in 2019, which is partly due to the increase of raw materials and consumables cost and staff cost caused by the fluctuation of bass price in the second half of 2018. Secondly, thanks to the rapid growth of the number of restaurants, customer unit price and the same store sales. However, we have to think about whether such profit growth rate is sustainable and how to achieve it. Lin Yuhua said.

Taier stores expand rapidly

Among all brands of jiumaojiu group, although jiumaojiu accounts for the highest proportion of revenue, the growth rate of Taier pickled fish revenue is the fastest. In the first half of 2019 alone, the revenue of 999 reached 683 million yuan, a year-on-year increase of 5.8%, accounting for 55.21% of the total revenue; the revenue of Taier reached 538 million yuan, a year-on-year increase of 146%, accounting for 43.38% of the total revenue.

In order to further improve market share, the company will penetrate its business into emerging markets such as first tier cities, new first tier cities, provincial capitals and surrounding cities, said Jiu Maojiu. In 2020 and 2021, 18 and 20 jiumaojiu restaurants and 80 and 100 Taier restaurants will be opened respectively. It can be seen that the future development focus is on Taier pickled fish.

Meituan commented on the 2018 pickled fish market development report that pickled fish category is still in the outbreak period of high growth. In 2018, the annual growth rate was 63.6%. In 2018, the number of searches on the mobile end of sauerkraut category exceeded that of braised chicken, and was far higher than that of boiled fish with the same Sichuan cuisine.

Although the popularity of sauerkraut fish is still high, there are many competitors. At present, in addition to Taier, there are many similar brands in the market, such as fish and you together, nine pots and one hall and Yanchu laotan sauerkraut fish. Among them, the number of fish and you together stores has exceeded 200, far exceeding 98 of Taier. In terms of customer unit price, it is reported that the customer unit price is controlled at about 35 yuan. If the company is listed successfully, it still faces fierce market competition pressure.

As for the future sinking market development plan and the competitiveness of the group, the relevant personnel of the group said in an interview with the China times that they would not accept media interviews at present. There are still many uncertain details about the listing, which are uncertain until the bell rings. Specific issues about the future plan will be announced in public later.

According to the prospectus, from June 30, 2016 to 2019, the proportion of income from Taier increased from 5.8% to 43.5%, and the proportion of income from jiumaojiu decreased from 93.8% to 55.2%. The turnover rate of jiumaojiu is maintained about 2.4 times / day, and that of Taier is maintained about 4.9 times / day. The main markets of the two core brands are in South China. As of August 20, 2019, there are 177 stores in South China, but there are only 66 stores in Central China, East China, West China and North China. In the future, there are risks of expanding the store selection or meeting regional taste differences.

In contrast, the overall turnover rate of Haidilao listed in Hong Kong stock market in 2018 is 5 times / day, that of new stores is only 4.5 times / day, and that of second tier cities is 5.3 times / day. The operation level of Taier pickled fish is similar to that of Haidilao. Taiers store opening speed and turnover rate were set at the peak of the industry. The growth rate of the industry is likely to slow down in the future. The operating profit and catering return time will be greatly reduced, and the store opening speed will be affected naturally. Jiumaojiu mainly expands to the north, and there will be more similar competitive products in these places. Relatively speaking, Taier pickled fish has serious homogeneity, brand awareness has not yet been opened, capital return can not be guaranteed, which ultimately affects store efficiency and store opening speed; to quickly copy, the most important thing to keep up with is management ability (supply chain, employees, etc.), in these aspects, the company may not have formed enough core competitiveness. Lin Yuhua told reporters. Source: Zhang Meiyu nf2100, editor in charge of Huaxia times

In contrast, the overall turnover rate of Haidilao listed in Hong Kong stock market in 2018 is 5 times / day, that of new stores is only 4.5 times / day, and that of second tier cities is 5.3 times / day. The operation level of Taier pickled fish is similar to that of Haidilao.

Taiers store opening speed and turnover rate were set at the peak of the industry. The growth rate of the industry is likely to slow down in the future. The operating profit and catering return time will be greatly reduced, and the store opening speed will be affected naturally. Jiumaojiu mainly expands to the north, and there will be more similar competitive products in these places. Relatively speaking, Taier pickled fish has serious homogeneity, brand awareness has not yet been opened, capital return can not be guaranteed, which ultimately affects store efficiency and store opening speed; to quickly copy, the most important thing to keep up with is management ability (supply chain, employees, etc.), in these aspects, the company may not have formed enough core competitiveness. Lin Yuhua told reporters.