In the late stage of the new crown epidemic, which industry was the first to enter the recovery?

By yqqlm yqqlm

On August 11, 2020, General Secretary Xi gave important instructions to stop food waste. He pointed out that the phenomenon of food waste is shocking and distressing! In fact, with the gradual reduction of the impact of the new crown epidemic, the catering industry in various regions has taken the lead in the recovery, and the performance of many companies in the catering industry has gradually improved. So what is the current situation of China’s catering industry? This article conducts a more detailed fundamental analysis of the catering industry to help you sort out investment opportunities in the catering industry.

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The catering market continues to expand and the supply side enters Stock competition stage.

From 2009 to 2019, the annual growth rate of the market scale of my country’s catering industry was 12.2%, and the industry as a whole showed rapid growth, with the market size exceeding 4.6 trillion yuan. However, from the perspective of the industry structure, there are many participants in the catering market, and the industry is highly fragmented and highly competitive. The catering industry has relatively low entry barriers, with self-employed and small and micro enterprises occupying an absolute majority. According to Tianyan Check data, as of the end of 2019, the number of registered enterprises in the catering industry in my country has exceeded 11 million, of which individual industrial and commercial enterprises accounted for 96.2%, and the number reached 10.69 million. Although the scale of the catering industry is still expanding at a relatively high speed, due to the highly fragmented industry, competition on the supply side has gradually entered the stage of stock development from incremental development.

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The epidemic amplifies the vulnerability of single-unit restaurants, The chain trend is on the rise.

In this competitive environment, the living environment of single-unit restaurant companies is even more difficult, and the epidemic has further magnified the vulnerability of their operations. On the one hand, due to the high capital turnover rate of the catering industry, the closure of dine-in food brought about by the epidemic has greatly narrowed the income side. Small catering companies have relatively insufficient cash flow, and the risk of cash flow shortage or cash flow rupture is high. On the other hand, single restaurant companies have low operating efficiency. Due to the small number of stores and small operating scales, it is difficult to form a scale effect, so the costs in terms of ingredients and other aspects are higher; at the same time, the low brand influence leads to rent bargaining power Lower. Various reasons have led to low overall profit margins for individual catering companies. In the post-epidemic recovery phase, when the passenger flow has not fully recovered, it is more difficult to achieve profitability. In this situation, the chain of restaurant companies in my country is gradually rising, and the market share of chain restaurants is gradually expanding.

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The advantages of”labeling” brand recovery are obvious. The epidemic has strengthened the industry Matthew effect.

The recovery of the catering industry after the epidemic will be polarized. The recovery of brands with”labeling” and strong image binding with dishes may be more optimistic. When consumers start to eat out, the first choice is some”non-home cooking” categories, such as hot pot, barbecue, milk tea, etc. If most consumers think of hot pot, they will first think of”Haidilao“, when you think of fruit tea, you will first think of”Hi Tea” and”Naixue”. We call it The image binding of the dishes has become an indispensable”label” for this type of catering. This”labeled” brand will become the first choice for consumers to eat out after the epidemic, thus taking the lead in realizing business recovery. Brands that can become”labeled” must be known to more consumers, so these brands are also likely to achieve more consumer groups through chain development, and have certain quality assurance. Form consumer reputation.

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Under pessimistic economic expectations, the central Or move down.

Declining disposable income and pessimistic expectations for the future economy have made consumers more cautious about consumer spending. Excluding price factors, the actual growth rate of per capita consumption expenditure of urban residents in my country is usually lower than the growth rate of per capita disposable income. In the first quarter of 2020, the actual disposable income of urban residents fell for the first time in the past ten years, down 3.9%year-on-year, while per capita consumption expenditure actually fell sharply by 13.5%year-on-year. Due to the outbreak of domestic and global epidemics, economic development has stagnated, and business damage has led to a decline in residents’ income levels. At the same time, people are generally pessimistic about the future global economy, which magnifies the impact of the decline in income levels on consumption tightening.

Although the overall catering industry will gradually recover as the epidemic stabilizes, due to pessimistic economic expectations and declining income levels, consumers’ catering consumption choices will shift. The per-customer price center may move downward, and the market space for high-end catering may shrink, and relatively affordable restaurants with quality and hygiene guarantees will be favored by more consumers.

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The layout of chain brand restaurant enterprises has a parity track with Innate advantages, low-priced and high-quality”small and beautiful” may become a new outlet for catering.

Chain brand restaurant enterprises have inherent advantages in laying out a parity track. Fast food chains have higher requirements for the supply chain. A national chain of branded restaurants has formed a parity track with supply chain and scale effect advantages, which can support chain development in terms of quality control and price. But at the same time, whether these companies with their original business positioning relative to mid-to-high-end dinners have the ability and genes to be a fast-food chain remains to be verified by the market. There are differences between dinner and fast food in terms of operation and management. At the same time, whether or not to develop products that take into account taste and cost control and achieve a high degree of standardization is also a major challenge for entering the fast food track. Xibei has been exploring the fast food track for 5-6 years, testing the water including Xibei Oat Village, Maixiang Village and other brands, but they have failed to obtain good market feedback.

After the epidemic, catering consumption will shift to a combination of”big brands”,”good taste”, and”high cost performance”. Currently, major brands are competing in parity The layout of Tao is in line with this trend. In the catering industry with many subdivided tracks and highly competitive, the choice of subdivided tracks and the grasp of the industry’s current or future needs and opportunities are very important, which largely determines the development space and prospects of the company. Under the epidemic situation, branded catering companies have stronger anti-risk capabilities, and “labeled” brands have obvious advantages in the recovery. With consumers’ pessimistic expectations of future income, consumers are more cautious in their choices, and their preference for online celebrity stores that only focus on form has weakened, and they are more inclined to restaurants that win by taste. At the same time, they will pay more attention to cost performance.

To sum up, in the economic recovery process of the new crown epidemic, the catering industry should be the first industry to recover, as long as the new crown epidemic is no longer large-scale in the future With the outbreak, the recovery of the catering industry will further accelerate. It is recommended that you focus on the mid-line layout opportunities of listed catering companies with the nature of chain groups (A-shares and Hong Kong stocks can be considered for attention).

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Risk reminder:1) Domestic epidemics have repeated to varying degrees; 2) Macroeconomic downturn; 3) Food safety issues.

Data:From China Securities Investment, Tongdaxin Quotes, Dragonfly Dianjin APP, Wind Information, and Dongxing Securities'”Catering Industry:The Epidemic Strengthens the Matthew Effect, and”Labeled” Brands Have More Recovery Advantages”.

Important reminder:The content of this article is only the personal opinion of the investment consultant, not the position of the company, and is for reference only. The individual stocks in the article are based on public information and are not recommended as specific investment recommendations. The historical trend of stocks cannot represent future trends. Investors operate accordingly at their own risk. The stock market is risky and investment needs to be cautious.

Text:Wang Qilei S1440611030053