Comparison of Chinese and American leading catering companies From Anxin securities

The following is the Comparison of Chinese and American leading catering companies From Anxin securities recommended by recordtrend.com. And this article belongs to the classification: Brokerage Report, Life data.

■ benchmarking American catering industry urbanization + cold chain technology + demand preference change drives the great development of fast food chain. Chain + branding is the inevitable trend of the development of China’s catering industry. 1) Chain: Euromonitor data show that the chain rate of catering in the United States reached 54.3% in 2019. ① On the demand side, the “baby boom” after World War II brought subsequent demographic growth dividends, driving the rapid development of American fast food industry from 1970 to 1990. Many food and fast food giants such as McDonald’s, KFC, Burger King and Wendy were established during this period. At the same time, the urbanization rate has increased by more than 80%, which has also further expanded the optional area for chain catering expansion, thus expanding the scale of consumers; ② On the supply side, the cold chain production technology has gradually matured, the central kitchen model of chain catering enterprises has been realized, and standardized production has greatly promoted the development of American fast food industry. 2) The awareness of young consumers + healthy diet drives the new development trend of fast leisure restaurants: with the increase of American people’s attention to healthy diet, millennials have gradually grown into the main consumer group, and have a stronger preference for fresh, healthy and natural ingredients. Fast leisure restaurants represented by chipotle have sprung up. While ensuring the production efficiency, Provide consumers with healthier food. 3) China trend: Based on the differences between ancient and modern social backgrounds and tastes between China and the United States, China’s emerging catering industry is in a stage of rapid development. Considering that China’s catering chain rate is only 10.3%, far lower than 54.3% in the United States, and China’s Cr50 proportion is only 4.9%, far lower than 27.72% in the United States, as well as the increase of urban population, the improvement of young consumption power and the improvement of catering supply chain, There is much room to improve the chain rate and brand concentration. It has become a new trend for the development of China’s catering industry to highlight the personalized needs of young consumers, improve the consumption power of the sinking market, create delicious and fun catering brands and tap the sinking market.

■ learn from the success of American chain catering brands, the core of catering enterprises should focus on Management + products + supply chain construction + marketing. We summarize and analyze the successful experience of American leading catering brands from four dimensions: 1) management: regardless of franchise or direct marketing mode, the company headquarters’ strict management of the daily operation of all stores is a required course to maintain a long-term good brand image. Referring to the experience of McDonald’s, it strengthens the management of the headquarters by strictly selecting franchisees, strengthening the supervision power of the headquarters through the “real estate + catering” mode and continuously providing franchisee training. McDonald’s and Starbucks have made detailed standardized sop to ensure the standardization of store operation and products. 2) Products: standardization is the guarantee of high quality and consistency of store products, and diversity and innovation are the “drug guide” to attract re purchase. Referring to McDonald’s experience, machining + standardized raw material supply and operation ensure the consistency of store products; At the same time, it has established a number of product R & D and quality management centers around the world, and an average of 1800 new menu items have been tested and evaluated every year to maintain the brand vitality with the classic + new product structure. Referring to the experience of Starbucks, it also guaranteed the standardization of products with fully automated equipment and standardized raw materials, continued to promote the research and development of new products, and launched explosive products such as “xingbingle” on the basis of short-term drainage. 3) Supply chain: building a perfect supply chain system is the basis for large-scale expansion. Maximize the scale effect, optimize the procurement and transportation cost structure, ensure the stable supply of raw materials and improve the operation efficiency of stores. Referring to McDonald’s experience, it has achieved deep binding with many small suppliers at the beginning of its development, which can provide raw materials for its R & D. Today, McDonald’s has formed a model of “a few core suppliers + many secondary suppliers”. There are 37 large distribution centers in the United States, forming a combination of “product suppliers + logistics suppliers” to complete the sales closed loop of restaurants, suppliers and logistics centers. When entering a new country, the company will also deploy the upstream supply chain first. 4) Marketing: continue to carry out marketing activities according to consumer preferences and brand characteristics, establish brand awareness for emerging brands, and keep mature brands young and fresh. Referring to chipotle’s experience, it is positioned as a consumer group of the millennial generation and is deeply rooted in the hearts of the people through interactive marketing through social media channels. Referring to McDonald’s experience, it has attached great importance to advertising and marketing investment since its inception. In 1967, it spent $2.3 million on the first national advertising campaign (accounting for about 1% of its sales), creating a precedent for large investment in chain fast food marketing. So far, the company has continued to maintain its marketing efforts through advertising partner investment and media advertising investment;

■ leading enterprises have gradually built high barriers, and there is still room for performance growth. After the epidemic, the demand of young consumers is still booming, and the young people win the world. Compared with the successful experience of American catering enterprises, we believe that China’s leading catering enterprises jiumaojiu, yum China, Haidilao and Xiabu also have a “success” gene in the dimensions of brand, management and supply chain. After the epidemic, due to the slow repair of the demand side and the prominent demand of young consumers in the consumption structure, catering enterprises still need to follow the trend. 1) At the right time, create an excellent single store model and strive for catering Digitization: ① jiumaojiu: grasp the rising trend of young consumption, the single store model is excellent and multi brand incubation can be expected. Having insight into the needs of young consumers and making full use of new media channels, Taier has gradually built its brand influence with a younger brand strategy. After the epidemic, young consumers’ demand for dining out is better than that of family dinner repair, driving Taier’s same store operation to accelerate repair, and the advantages of single store model are prominent. At the same time, driven by Taier main force + incubation of new brands such as counseling hot pot + reconstruction of jiumaojiu model, the company has broad exhibition space and performance growth is expected to exceed expectations. ② Yum China: embrace the wave of youth + takeout and meet the rapid growth. In the short term, KFC and Pizza Hut enjoy the investment results of early takeout system construction and digital ordering, grasp the needs of young consumers and realize the rapid repair of store operation. At the same time, in the sinking market, KFC’s single store model performs well, and the exhibition space is also broad. Pizza Hut adjusts its business strategy, embraces diversified marketing cooperation, and increases offline promotion. In the future, the single store model is expected to be further improved to promote the opening of brand exhibition space. 2) Grasp the good opportunity of post epidemic transformation and turn danger into opportunity: ① Haidilao: the company has deep competitive barriers in the dimensions of management + whole industry chain layout + brand advantage. Although there are some challenges in accelerating the turnover rate of exhibition stores in 2020, the company has taken measures to adjust and deal with it from the perspective of operation and management. At the operational level, from 2020 to 21, the company will introduce tea making paradise and increase the preferential treatment for leisure meals in order to attract more passengers. At the same time, the customer unit price will be increased by means of differentiated pricing strategy and optimizing product structure. Driven by the comprehensive reform and optimization of operation and management, the company’s operation is expected to be repaired steadily in the second half of the year. In addition, the company has performed well in the turnover rate of third tier and below cities. Relying on strong brand influence and supply chain support, the sinking market and exhibition space are also broad. ② Xiabu Xiabu: executives are in turmoil and turnover rate is under pressure. In order to promote the integration of middle and back office resources of Xiabu Xiabu and scrape together, optimize the employee incentive model, or open the internal franchise partnership model and optimize the single store model, we still need to continue to pay attention to the reform promotion process and the same store data.

■ mature brand PE center is stable 25 ~ 30x, emerging enterprise performance + valuation are driven together, and high same store growth lays a good valuation foundation for 50 ~ 60xpe. We reviewed the market performance of the representative enterprises of the two branches of emerging and mature brands in the U.S. catering industry, and summarized it from the two dimensions of valuation level and stock price fluctuation as follows: 1) how to evaluate? In the steady state, mature enterprises are 25 ~ 30 times PE, and emerging enterprises are 50 ~ 60 times PE in the high development period. ① Mature enterprises: Taking Starbucks and McDonald’s as examples, PE fluctuations basically anchor the same store sales growth rate. Under the condition of leading enterprise brand premium + mature business model + steady store exhibition, when the same store sales growth rate is stable at about 5%, PE is stable at 25 ~ 30x; ② Emerging enterprises: taking chipotle and wingstop as examples, as leaders of leisure fast food and chicken wing brands, they have strong brand power, fast exhibition speed and high growth in the same store. In terms of valuation, when chipotle maintains a high growth rate in the same store (usually higher than 10%), the PE anchor fluctuates in the range of 50 ~ 60x. Under the influence of negative events, when the growth rate in the same store drops to a low number of units (usually lower than 5%), PE drops to 20 ~ 30x; The listing time of wingstop coincided with the general rise of the catering sector, laying a high valuation foundation. Under the condition that the growth rate of the same store remained low, PE was still 50 ~ 60x. The growth trend of takeout business in recent years brought significant benefits to the company. The growth rate of same store sales increased, and PE rose to a high of 120x. 2) What is the fluctuation of stock price? Pay attention to the same store operation, food safety problems and industry development trend. ① Mature enterprises: under a relatively stable valuation system, stable same store growth gradually thickened performance and stable stock price growth. ② Emerging catering enterprises: due to the improvement of consumer preferences or business development trend, the growth of same store sales drives high performance growth, and Davis double click drives high stock price growth. Under the influence of food safety incidents, the share prices of more mature emerging enterprises have been suppressed for a long time, mainly due to the weak control ability of emerging enterprises on food safety and the longer time it takes to regain consumer trust. Taking chipotle’s food safety crisis in 2015-16 as an example, its share price continued to decline in the following three years.

■ focus on the repair process of the same store operation in the second half of the year in the short term, and the valuation is expected to rebound. Based on the valuation changes of emerging catering enterprises and mature catering enterprises in the United States, we believe that China’s listed catering enterprises focus on the same store operation repair in the second half of the year in the short term, and the valuation is expected to rise after the same store operation repair; In the medium and long term, we continue to be optimistic about the development space of catering leaders under the background of catering chain + industrialization. ① Jiumaojiu: relying on Taier’s excellent same store repair performance + broad exhibition space, the valuation can be compared with chipotle. The current market value corresponds to 65x PE in 2022, which is in a reasonable range. ② Yum China: KFC seizes the opportunity of takeout + Digital ordering, quickly repairs in the same store, superimposes the sinking market, and has a broad exhibition space. It can benchmark wingstop, which has the same opportunity to seize takeout under the epidemic. Its current market value corresponds to 23x PE in 2022, and has great growth potential. ③ Haidilao: if the same store operation in the first and second tier cities can recover quickly after active reform and adjustment, the exhibition space of the company’s first and second tier cities will be opened again. The current market value corresponds to 33x PE in 2022, which has great growth potential. It is still necessary to continue to track the internal assessment and incentive mechanism to promote the same store operation and repair in the next tier and second tier cities.

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