Thank Inn Plus Hotel Shares | Q1 2022 Financial Reports of Listed Catering Companies
Under the impact of the pandemic, some areas in Shanghai, Shenzhen, Dongguan, Guangzhou, Changchun, Beijing and other places successively announced the suspension of dine-in services, and the slowly recovering catering industry was hit again. According to data from the National Bureau of Statistics, in Q1 2022, catering revenue reached 1,065.3 billion yuan, accounting for 9.8% of total retail sales of consumer goods, with a year-on-year increase of 0.5%. In March, the pandemic spread to 30 provinces in China, impacting the stable recovery of the economy. As a consumer service industry, the catering sector suffered severely, with a year-on-year decline of over 16%. Among them, total retail sales in March fell 3.5% year-on-year to 3,423.3 billion yuan, and catering revenue dropped 16.4% year-on-year to 293.5 billion yuan, the lowest level since June 2020.
As the complexity and uncertainty of the domestic and international environment gradually increase, all regions across the country have been scientifically coordinating pandemic prevention and control with economic and social development, adhering to the principle of stability as the top priority and seeking progress while maintaining stability. In Q1, the government frequently introduced policies to aid enterprises and promote the recovery of the catering industry. On February 18, 14 departments including the National Development and Reform Commission jointly issued 'Several Policies on Promoting the Recovery and Development of Difficult Industries in the Service Sector,' proposing seven supportive measures for the catering industry, such as 'providing subsidies for enterprise epidemic prevention and disinfection expenses' and 'encouraging government financing guarantee institutions to provide credit enhancement support for eligible small, medium and micro catering enterprises.' On March 28, the General Office of the State-owned Assets Supervision and Administration Commission issued the 'Notice on Effectively Implementing Rent Reduction and Waiver for Micro, Small and Medium-sized Service Enterprises and Individual Businesses in 2022,' requiring central enterprises to promptly and solidly carry out rent reductions in 2022, genuinely helping struggling service industries recover and overcome difficulties.
Guided by national policies, various regions have also introduced tailored relief measures, including provinces and cities such as Anhui, Qingdao, Nanjing, Beijing, and Guangzhou, which have implemented specific measures like deferring or reducing housing provident fund payments, lowering operating costs for platform economy participants, issuing consumption vouchers, and promoting the development of pre-made dishes. In May, regions like Guangdong and Shandong successively issued provincial-level policies for the pre-made dish industry, vigorously advancing its development.
Although the pandemic has put considerable short-term pressure on the catering industry, against the backdrop of the government's continuous relief and support policies, the resilient catering sector is expected to gradually recover. This article selects 20 representative A-share listed catering companies and, based on their disclosed financial data and publicly available online information, analyzes the performance of different types of catering enterprises in the A-share market in Q1.
I. Overall Revenue Performance of Catering Enterprises in Q1: Revenue growth of listed catering companies slowed due to the pandemic
Looking at the Q1 performance of catering enterprises, overall revenue was roughly flat compared to the same period last year, but the growth rate declined rapidly from positive to negative, and overall profitability was worrying. According to statistics from Meadin Research Institute, in Q1 2022, the cumulative revenue of 20 A-share catering enterprises reached 12.297 billion yuan, a year-on-year increase of 1.79%; among them, 13 companies achieved revenue growth, while 7 saw declines.
In terms of net profit, cumulative net profit was 24 million yuan, down an average of 94.86% from 470 million yuan in Q1 2021. Seven companies saw net profit increase year-on-year, while 13 saw declines. Among them, 8 were in the red, 6 more than in the same period of 2021; additionally, Yike Food, Yiming Food, Ganso, Dahu Corporation, and Zhongke Yunwang all shifted from profit to loss.
The sluggish revenue growth and sharp drop in net profit in Q1 were mainly due to the significant overall impact of sporadic domestic outbreaks on contact-intensive and gathering-type industries like catering services. Especially in high- and medium-risk areas, dine-in services and even takeout suffered temporary shutdowns, and logistics disruptions in many places led to increased revenue without profit growth for listed catering companies, intensifying operational pressure.
II. Revenue Performance of Time-honored Catering Brands in Q1: Hit by the pandemic, time-honored brands have been entering the pre-made dish business
With the release of Q1 financial reports, time-honored catering brands were hit by the pandemic, with revenue growth slowing—average revenue growth dropped from 55.61% in Q1 2021 to 6.44% in Q1 2022. In terms of net profit, Guangzhou Restaurant and Tongqinglou remained profitable, while Xi'an Catering and Quanjude suffered losses in Q1. Xi'an Catering and Quanjude were the most severely affected by the pandemic.
All of Xi'an Catering's outlets suspended dine-in operations from December 13, 2021 to January 24, 2022. For Quanjude, after the pandemic intensified in various places in March, a total of 31 store visits were directly impacted, and its March catering revenue was at a relatively low level in recent years, significantly affecting Q1 operations.
In addition to the pandemic, rising costs also constrained profit growth for time-honored brands. Viewed from both net profit margin and gross margin, Xi'an Catering and Quanjude's profitability indicators are at historical lows. Xi'an Catering attributed its low profit margins mainly to the pandemic and rising costs of raw materials, labor, and leasing. However, data from recent years show that the company's profitability has been weakening since 2018, possibly related to its product strategy and business model.
In Q1, among the time-honored catering brands, only Guangzhou Restaurant achieved growth in both revenue and net profit. With a net profit of 53 million yuan, Guangzhou Restaurant topped the list for net profit among time-honored brands, a year-on-year increase of 11.83%. The growth was mainly driven by its frozen food business, with frozen food revenue reaching 235 million yuan, up 27.66% year-on-year. This indicates that the environmental risk resilience of frozen foods has been proven during the pandemic.
Since 2020, to cope with the severe blow dealt by the pandemic to the catering industry, various catering enterprises have expanded non-dine-in businesses such as pre-made dishes. Time-honored brands have leveraged their brand advantages to enter the pre-made dish market, promoting the food-oriented transformation of catering products. The financial reports of Guangzhou Restaurant, Xi'an Catering, Quanjude, and others all signal increased investment in pre-made dishes.
According to Guangzhou Restaurant's 2021 annual report, in 2022 the company will accelerate R&D of new categories, launch special holiday set meals and seasonal limited dishes, and develop pre-made dishes such as poon choi and frozen prepared foods. Quanjude stated that before the end of June this year, its group's Sichuan Restaurant, Fengzeyuan, and Quanjude brands will successively introduce pre-made dishes. Tongqinglou indicated in January this year that pre-made dishes are a key business segment for development, though this business is still in its infancy.
It is hoped that time-honored catering enterprises will actively innovate in food R&D and sales amid fierce competition and cultivate new growth drivers.
III. Revenue Performance of Pre-made Dish Enterprises in Q1: Pre-made dish companies saw revenue growth and are poised for rapid development
Currently, listed companies in the pre-made dish sector fall mainly into the following categories: in addition to catering enterprises like Guangzhou Restaurant and Tongqinglou expanding into pre-made dishes, there are also companies focused solely on pre-made dishes, such as Weizhixiang, known as 'the first pre-made dish stock'; frozen food companies broadening their pre-made dish product lines like Qianweiyangchu; and upstream agricultural and aquatic leaders like Yike Food, Delisi, Guolian Aquatic, and Chunxue Food.
In the face of the pandemic's impact on the entire catering industry, pre-made dish enterprises performed relatively well overall. Looking at Q1 2022 revenue data, the cumulative revenue of six A-share pre-made dish companies reached 6.405 billion yuan, a year-on-year increase of 3%. Related listed companies—Yike Food, Chunxue Food, Qianweiyangchu, and Weizhixiang—all achieved revenue growth, with Qianweiyangchu, known as 'the first stock in the frozen supply chain,' posting the highest increase of over 20% year-on-year. This is linked to Qianweiyangchu's strong cost control and high level of industrial scale. Qianweiyangchu noted that pre-made dishes were a key business focus in 2021.
In terms of net profit, except for Yike Food which posted some losses, all other pre-made dish enterprises—such as Guolian Aquatic, Delisi, Chunxue Food, Qianweiyangchu, and Weizhixiang—were profitable. Among them, Weizhixiang, Delisi, and Chunxue Food took the top three spots in net profit. The main reasons are related to optimizing product structures, capitalizing on the consumption growth trend during the Spring Festival, increasing the production and sales of high-value-added pre-made dishes, improving sales channel layout, and strictly controlling various costs and expenses, thereby achieving rapid profit growth.
At present, the pre-made dish industry in China is still in its early stages. As industry leaders increase concentration and enterprises within the industrial chain extend into the pre-made dish sector, pre-made dishes are expected to generate business synergies, develop rapidly, and usher in vast market opportunities.
IV. Revenue Performance of Braised Snack Enterprises in Q1: Store expansion drives growth, but store operational capabilities need improvement
The braised snack industry is a massive market worth several hundred billion yuan, and it has maintained rapid growth in recent years. According to the '2022 Braised Snack Category Development Report,' the compound annual growth rate of the braised snack market from 2018 to 2021 was 12.3%. In 2022, the scale of China's braised snack industry is expected to reach 369.1 billion yuan, and it is projected to hit 405.1 billion yuan by 2023. Braised snacks are becoming a hot track.
In Q1, although the overall catering environment was under pressure, the financial reports of listed braised snack enterprises show that Juewei Food, as the leader in the leisure braised snack market, continued to maintain high revenue growth, mainly thanks to an increase in its store count.
In the braised snack industry, store count is crucial to revenue and determines profits. In terms of store numbers, Juewei Food maintained a leading edge. By the end of 2021, its total stores in mainland China reached 13,714, a net increase of 1,315 for the year, surpassing Huangshanghuang's 4,281 stores and Zhouheiya's 2,781 stores in the same period. In contrast, Huangshanghuang's store count dropped from 4,627 in 2020 to 4,281, so the slowdown in store expansion and declining per-store revenue led to its revenue decline.
However, looking at gross margins, the store expansion model did drive performance growth for braised snack companies, but their gross margins did not increase. Juewei Food's gross margin has long been lower than that of Huangshanghuang, which has fewer stores. From 2020 to Q1 2022, Juewei Food's gross margins were 29.69%, 34.49%, and 30.31%, respectively. Over the same period, Huangshanghuang's gross margins all exceeded 30%. Therefore, while store count growth boosted revenue and net profit, braised snack companies still need to explore new profit models given the decline in per-store revenue. In the long run, the operational quality of stores and the promotion of online channels may be more important.
Currently, the braised snack market has low concentration, with market share still dominated by Zhouheiya, Huangshanghuang, and Juewei Food, and top brands account for less than 20%. There remains significant room for future growth. It is hoped that with the steady recovery of society and the economy, the braised snack industry will develop more diversified channels, products, and marketing methods to further attract young consumers, enhance store operational capabilities, and continue to promote stable industry growth.
In Q1, under the influence of the pandemic and other uncertainties, the recovery of the catering industry slowed. Meanwhile, rising costs, increasing pressure, and complex management structures made operations even harder for catering enterprises. However, with effective pandemic control, macroeconomic improvement, gradual implementation of relief policies for catering, and recovery of the consumer market, national catering revenue is expected to show a restorative growth trend. It is hoped that while continuing regular pandemic prevention and control, catering enterprises will seize opportunities, actively expand new consumption models, strengthen product R&D, innovate food sales business models, and grasp new trends such as the food-ification, retailization, and multi-scenario development of catering, so as to cultivate new revenue growth drivers.
VI. About Meadin Research Institute
Meadin Research Institute, established in 2009, is a leading strategic research and consulting institution for commercial space assets in China.
Meadin Research Institute has long been dedicated to building a big data business analysis platform, using 'data productivity' to transform cognition and enhance corporate efficiency. It provides enterprises and public institutions seeking to enter or expand in the commercial space sector with diversified big data solutions based on intelligence + data + services. By turning 'numbers' into 'evidence,' it assists clients in making major decisions and identifying investment risks.
Meadin Research Institute first delved into brand asset research for commercial spaces, presenting intangible brand assets through tangible data dimensions. It innovatively developed brand dynamic data monitoring systems—MBI (Meadin Brand Index), MCI (Meadin Hotel Competitiveness Index), and MVI (Meadin Short Video Influence Index)—hailed as the 'Forbes of the industry' list. Based on this, it provides strategic, operational, and organizational consulting services to clients needing scientific resource allocation for projects, enhancing the asset value of project spaces, improving operational pricing power and returns, and ensuring steady financial growth. At the same time, Meadin Research Institute actively participates in public policy consulting and public utilities construction. It is a leading professional consulting institution in China focusing on strategy, operations, organization, and mergers & acquisitions in the commercial space field.
1) On February 14, 2022, the industry's first short video influence index MVI was launched, covering 6,000 hotel brands and 100,000 scenic spots and amusement parks nationwide;
2) On August 21, 2021, the first brand index report for culture and tourism groups was released, covering 1,000 groups nationwide;
3) On October 1, 2020, the Meadin Hotel Competitiveness Index MCI, six years in the making, was launched, covering 900,000 independent hotels nationwide;
4) On June 15, 2020, the first brand blue book for the tourism accommodation industry, 'China Tourism Accommodation Brand Development Report (2019-2020),' was published;
5) On January 10, 2019, the first brand blue book for the rental property industry, 'China Housing Rental Brand Development Report (2018),' was officially released and was selected for the '2018 Blue Book Comprehensive Evaluation Top 100';
6) On August 1, 2018, the first scenic spot brand index was launched, covering 100,000 scenic spots and amusement parks nationwide;
7) On April 26, 2018, partnered with Brand China Strategic Planning Institute to build a brand ecosystem for the commercial space industry;
8) On October 21, 2016, jointly built a consumer sentiment big data platform with People's Online, a national carrier-level database institution;
9) On October 20, 2016, collaborated with TalkingData, a service provider for 4 billion terminal devices, to create an industry big data operation platform;
10) On February 1, 2016, entered the real estate innovation sector, bringing 5,000 housing rental, office space, commercial complex, and property brands under monitoring;
11) On July 1, 2015, launched the value ranking of 100 upstream and downstream supply chain categories in the tourism accommodation industry;
12) On August 27, 2013, launched the annual research guide covering 6,000 tourism accommodation brands;
13) On August 1, 2011, the brand value evaluation system for the commercial space industry, developed over three years, went online;
14) On June 15, 2009, the first big data analysis report for the commercial space industry was released.
After over a decade of internet big data accumulation, Meadin Research Institute has built a comprehensive big data platform library for the commercial space industry, covering investment and development, brand building, operation management, customer marketing, and other segments; it includes over 6,000 tourism accommodation brands, 900,000 urban independent hotels, 100,000 scenic spot and amusement park brands, 1,000 culture and tourism group brands, 2,000 housing rental brands, 2,000 commercial office brands, 1,000 property brands, and 30,000 upstream and downstream supply chain service provider brands, etc.
About Thank Inn Plus Hotel
Thank Inn Plus Hotel is a key development strategic segment of Sunmei Group, a mid-range brand targeting the lower-tier market, focusing on mid-scale hotels in third-, fourth-, and fifth-tier cities. It advocates design concepts of Eastern aesthetics and tea culture, adheres to hotel space design that balances consumption upgrades with cost reduction and efficiency gains, and is committed to providing every guest with a home-away-from-home experience through features such as quality selection, smart technology, and convenience.
Under the general trend of smart hotels, Thank Inn Plus Hotel is forward-thinking, actively embracing changes in the times and industry, and innovatively created a highly intelligent operational tool—'AI Store Manager,' which uses 'big data + AI technology' to build a self-evolving digital store manager. It combines six major advantages: smart operations, intelligent pricing, quality enhancement, private domain promotion, employee management, and Douyin empowerment, providing 24/7 service and empowering the intelligent management of Thank Inn Plus Hotel. [Source: Meadin.com]
