\u3000\u3000 Shanghai Milkground Food Tech Co.Ltd(600882) (600882)
Event: the company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company in 2021 will be 140-180 million yuan, with a year-on-year increase of 136.26-203.76%, lower than the market expectation.
The industry competition intensified, and the performance of 21q4 was lower than expected.
According to the company's performance forecast, the net profit attributable to the parent company of 21q4 is expected to be - 3.35 million yuan to 36.65 million yuan, a year-on-year increase of - 152% - 471%; The median was 16.65 million yuan, a year-on-year increase of + 160%. We believe that the company's 21q4 performance is lower than expected for the following reasons:
1) intensified industry competition and increased costs: the cheese stick segment with high growth and high gross profit has attracted a large number of participants, and the competition for low-temperature cheese sticks is becoming increasingly fierce. In terms of normal temperature cheese sticks, 21q4 Yili also listed normal temperature cheese sticks, increasing market competition. Under the pressure of high market competition, the company increases the investment of sales expenses; In addition, the company increased marketing publicity in advance for the 22-year Spring Festival peak season, resulting in high 21q4 sales expense rate and pressure on profits.
2) there is certain competition in the actual sales of normal temperature and low temperature cheese sticks, which affects the growth of cheese stick business. According to grassroots research, since the previous constant and low temperature cheese belonged to different departments, there was inevitably positive competition in terminal sales, which affected the overall performance growth of cheese sticks. To this end, the company adjusted its organizational structure. The original normal and low temperature business division was merged and changed into the north and South business division, which is conducive to overall sales planning and fine management, as well as strengthening the division of normal and low temperature channels.
The first position of the company in the industry is stable, and the production capacity is steadily promoted.
In 2021, the market share of Shanghai Milkground Food Tech Co.Ltd(600882) C-end cheese was about 40%, which was still the first in the industry. The second / third / fourth place in the industry was baijifu / Yili / Mengniu respectively, and the market share in 2021 was about 20% / 10% / 10% respectively. The company will continue to lay out the production capacity of normal and low temperature cheese, give full play to the advantages of production capacity and products, and the market share is expected to reach 40% in 2022. In terms of production lines, the company had 10 normal temperature production lines at the end of September, and 20 new ones have been added at present, which has a certain capacity first mover advantage compared with competitors. At present, the company has a total of 80 constant low temperature cheese and catering production lines, which is expected to increase to 100 by the end of 2022, laying a foundation for the achievement of equity incentive objectives.
Profit forecast, valuation and rating: considering that the competition in the cheese industry is more intense than expected and the company increases the investment, we lowered the forecast of Shanghai Milkground Food Tech Co.Ltd(600882) net profit attributable to the parent company from 2021 to 2023 to 165 / 488 / 897 million yuan respectively (compared with the previous forecast of - 42% / - 28% / - 23%), equivalent to EPS of 0.32/0.95/1.74 yuan from 2021 to 2023 respectively, and the current share price corresponds to PE of 129x / 43x / 24x from 2021 to 2023 respectively. Shanghai Milkground Food Tech Co.Ltd(600882) the performance is under pressure in the short term. It is recommended to pay attention to the channel laying and terminal sales progress of the company's normal temperature cheese stick. The cheese industry still maintained rapid growth, the leading position of Shanghai Milkground Food Tech Co.Ltd(600882) industry was stable, and the "buy" rating was maintained.
Risk warning: the release of production capacity is less than expected; The growth of new products is lower than expected; Rising prices of raw materials; Food Safety.
