This is an English adaptation of a FoodBud historical article originally published on April 28, 2022.
FoodBud reviewed Q1 2022 results from listed restaurant groups and foodservice suppliers. The picture was uneven: some chains and suppliers saw heavy profit pressure, while others continued to grow.
Ajisen China had previously reported that Q1 2022 same-store sales fell 19% year on year, while restaurant business sales revenue fell 20.7%.
1. Juewei Food
Juewei Food reported Q1 revenue of RMB 1.69 billion, up 12.09% year on year. Net profit attributable to the listed company was RMB 89.067 million, down 62.24%.
The company provided substantial subsidies to franchisees in Q4 2021 and Q1 2022. Selling expenses in Q1 rose by RMB 140 million versus Q1 2021.
On the same day, Juewei also released its 2021 annual report: revenue was RMB 6.549 billion, up 24.12%, and net profit was RMB 981 million, up 39.86%. As of year-end 2021, it had 13,714 stores in mainland China, excluding Hong Kong, Macau, Taiwan and overseas markets. Overseas revenue was RMB 114 million in 2021, up 23.76%.
2. Huangshanghuang
Huangshanghuang, one of China’s three major braised-duck chains, reported Q1 2022 revenue of RMB 540 million, down 10.62% year on year. Net profit was RMB 36.585 million, down 45.57%.
As of the end of December 2021, its meat-products processing business had 4,281 specialty stores: 307 directly operated stores and 3,974 franchised stores. Its sales network covered 27 provinces or municipalities and 243 prefecture-level cities. The company planned to open 1,059 new stores in 2022, including 86 directly operated stores.
For full-year 2021, Huangshanghuang revenue was RMB 2.33 billion, down 4%.
3. Babi Food
Babi Food reported Q1 2022 revenue of RMB 300 million, up 22.38% year on year. Net profit attributable to shareholders of the listed company was RMB 1.45 million, down 89.46%.
The sharp profit decline was mainly linked to a decrease in the value of Babi Food’s shareholding in Eastroc Beverage. Q1 adjusted net profit excluding non-recurring items was RMB 38.81 million, up 192.61%.
Franchise sales accounted for 75.1% of revenue, while group-meal channel sales accounted for 20.83%. The company’s business was concentrated in East China, which contributed 91.41% of revenue. As of the end of March 2022, Babi Mantou had 4,177 stores.
4. Ganso Food
Ganso Food reported Q1 revenue of RMB 436 million, up 7.94% year on year, and a net loss of RMB 18.91 million.
Online e-commerce already accounted for 59.95% of revenue. Offline sales revenue fell 23.35% year on year, while online sales revenue rose 48.17%.
By category, cake revenue in Q1 was RMB 260 million, up 20.58%. Chinese and Western pastries and fruit both declined, down 9.18% and 9.89%, respectively.
5. Guangzhou Restaurant
Guangzhou Restaurant reported Q1 revenue of RMB 750 million, up 11.51% year on year. Net profit was RMB 52.51 million, up 10.36%.
Frozen-food revenue was RMB 270 million, up 27.66%, while restaurant-business revenue was RMB 220 million, up 26.14%.
6. Weizhixiang
Weizhixiang, described as China’s first listed prepared-food company, reported Q1 2022 revenue of RMB 186 million, up 14.17% year on year. Net profit was RMB 35.69 million, up 21.9%.
The company had built two core product brands: Weizhixiang for consumers and Zhuanyu for business customers. Its portfolio included more than 300 products across meat and poultry, aquatic products and other categories.
As of year-end 2021, Weizhixiang had 1,319 franchised stores and 572 cooperative distributors, building a franchise ecosystem mainly around wet markets.
For 2021, Weizhixiang recorded revenue of RMB 765 million, up 22.84%, and net profit attributable to shareholders of the listed company of RMB 133 million, up 6.06%.
By product type, meat products generated RMB 533 million in revenue, or 70.68% of annual main-business revenue. Beef products generated RMB 355 million, or 47.10%. By region, East China generated RMB 724 million, or 96.02%. By sales model, franchised stores generated RMB 346 million, or 45.99%, while wholesale channels generated RMB 244 million, or 32.35%.
7. Quanjude
Quanjude reported Q1 revenue of RMB 214 million, up 4% year on year, and a net loss of RMB 47.286 million.
8. Ligao Foods
Ligao Foods, a leading frozen-bakery player, reported Q1 revenue of RMB 630 million, up 8.83% year on year. Net profit was RMB 40.02 million, down 45.29%, mainly due to lower gross margin and other factors.
For full-year 2021, revenue was RMB 2.8 billion, up 55.66%, and net profit was RMB 280 million, up 21.98%.
Frozen bakery revenue in 2021 was RMB 1.7 billion, up 79.7%, but gross margin declined by 4.11 percentage points year on year.
Distributor, direct-sales and retail revenue were RMB 1.83 billion, RMB 960 million and RMB 200 million, respectively. Direct-sales and retail revenue grew rapidly, up 144.6% and 140.33%, respectively.
In 2021, Ligao’s top five customers accounted for 28% of total revenue. Its largest customer was Walmart, with RMB 660 million in sales, or 23.57% of annual total sales.
9. Qianwei Yangchu
Qianwei Yangchu, a T1 supplier to Yum China, reported Q1 2022 revenue of RMB 350 million, up 20.17% year on year. Net profit was RMB 28.709 million, up 44.78%.
In 2021, Qianwei Yangchu generated revenue of RMB 1.27 billion, up 34.89%. Fried-product revenue was RMB 660 million, accounting for 51.85% of total revenue.
Its three fastest-growing product lines in 2021 were youtiao, steamed dumplings and pastry products. Revenue was RMB 350 million, RMB 140 million and RMB 120 million, respectively, with year-on-year growth of 34.65%, 167.87% and 29.98%.
Direct customers included Yum China, Haidilao, Wallace, Real Kungfu and Jiumaojiu. Yum China was Qianwei Yangchu’s largest customer in 2021, contributing RMB 245 million in revenue, up 11.15%.
10. Sunner Development
Sunner Development, also a T1 supplier to Yum China, reported Q1 2022 revenue of RMB 3.38 billion, up 9.45% year on year, and a net loss of RMB 65.33 million.
The sharp profit decline was mainly due to chicken prices being at the bottom of the cycle and continued high prices for bulk raw materials since the Spring Festival.
After more than 30 years in the white-feather broiler industry, Sunner had built long-term strategic partnerships with Yum China, McDonald’s, Dicos, Walmart, Yonghui and other domestic and international customers.
In 2021, Sunner revenue was RMB 14.48 billion, including RMB 13.6 billion from main-business revenue, up 4.82% from 2020. Full-year net profit was RMB 448 million. Compared with 2020, excluding external market factors such as higher corn and soybean-meal raw-material costs and lower chicken sales prices in 2021, full-year net profit would have increased by about RMB 1.83 billion, or about 12% versus 2020.
Yum China was Sunner’s largest customer in 2021, contributing RMB 3.26 billion in sales revenue, or 22.5% of annual sales.
11. Huashi Food
Huashi Food, a NEEQ-listed company within the Wallace system, reported Q1 2022 revenue of RMB 1.34 billion, up 19.96% year on year. Net profit was RMB 13.036 million, down 65.14%, mainly due to a sharp rise in transportation costs.
According to Huashi Food’s 2021 annual report, full-year revenue was RMB 5.65 billion, up 61.64%, and net profit was RMB 140 million, up 51.86%.
By product category, dry goods and frozen goods generated RMB 2.29 billion and RMB 3.17 billion in revenue, respectively, but gross margin declined in both categories, down 9.27% and 10.98%. Equipment revenue was RMB 170 million, and gross margin rose 11.51 percentage points year on year.
Huashi Food’s top five suppliers in 2021 were Shandong Weiku, Sensheng, Quanzhou Jinhe, Nanwang Technology and Nanjing Kaiyue. Fourth-ranked Nanwang Technology had submitted a prospectus the previous year, planned to go public, and was a related party of Huashi Food.
Related-party transactions in 2021 totaled RMB 1.2 billion.
FoodBud also reviewed major international foodservice players.
According to an Associated Press report on April 27, 2022, Dr. Anthony Fauci said COVID-19 was under better control in the United States, but the pandemic was not over and the challenge was how to keep improving the situation.
The report said Fauci told the Associated Press that the pandemic was at a different moment. After the winter surge in infections, the growth rate of infections had slowed, but that did not mean the pandemic had ended.
A day earlier, he had said on PBS NewsHour that the United States was out of the pandemic phase, and told The Washington Post that the country had finally exited the full-blown explosive pandemic phase.
1. Domino’s Pizza
Domino’s Pizza reported Q1 2022 revenue of USD 1.0 billion, up 2.8% year on year. Net profit was USD 90.964 million, down 22.8%.
U.S. same-store sales fell 3.6%, while international same-store sales rose 1.2%.
Domino’s opened 213 net new stores in Q1: 37 in the U.S. and 176 internationally. As of March 27, 2022, Domino’s had 19,061 stores globally, including 6,597 in the U.S. and 12,464 in international markets.
2. The Cheesecake Factory
The Cheesecake Factory reported Q1 2022 revenue of USD 790 million, up 26.5% year on year. Net profit was USD 23.163 million.
As of March 29, 2022, it had 306 company-operated restaurants, including 208 The Cheesecake Factory restaurants. It also had 29 international franchised stores. Its other two brands, North Italia and Other FRC, had 29 and 31 company-operated stores, respectively.
The Cheesecake Factory’s franchisee in China was Hong Kong-based Maxim’s Group, with three stores in Shanghai and one in Beijing.
According to The Cheesecake Factory data, annual revenue per store was USD 11.1 million.
3. Chipotle
Chipotle reported Q1 2022 revenue of USD 2.0 billion, up 16% year on year. Net profit was USD 160 million.
It opened 51 new stores in Q1, including 42 with Chipotlane.
4. McDonald’s
McDonald’s reported Q1 2022 revenue of USD 5.67 billion, up 11% year on year. Net profit was USD 1.1 billion, down 28%.
As of March 31, 2022, McDonald’s had 40,344 stores globally, including 4,633 in China. China added 706 net new stores over the prior 12 months.
At year-end 2021, McDonald’s had 40,031 stores globally, meaning it added 313 net new stores in Q1 2022.
Note: forward-looking store-opening plans and IPO/shareholding-related figures are historical and refer to the period reported in 2021-2022.