\u3000\u3000 Fu Jian Anjoy Foods Co.Ltd(603345) (603345)
The scale of quick-frozen food industry has reached 100 billion, but the product profit is meager. The scale of China’s quick-frozen food industry has steadily increased from 45.7 billion yuan in 2011 to 140 billion yuan in 2020, with an average annual compound growth rate of more than 10%. Compared with overseas markets, China’s per capita consumption of quick-frozen food is only 9 kg / year, and there are less than 1000 kinds of SKUs. The development of the industry is about in the 1980s in Japan, and the industry has broad growth space in the future. Compared with other mass goods industries, the profit of quick-frozen food products is relatively weak, with a gross profit margin of 25-35% and a roe of less than 10%. Therefore, although the industry has a large scale and broad growth space, there are few quick-frozen food enterprises that can actually create sustained and stable profits, but Anji has achieved a profit growth level far ahead of the industry.
Strong channel force promotes scale expansion and brings stable growth. Anji has achieved a growth rate significantly ahead of the industry, mainly thanks to the strong channel force to help the company achieve effective expansion of scale: 1) the company has stable distribution resources and high loyalty. Through years of accumulation, Anji has built a number of large business resources with high loyalty, good cooperation and strong strength; 2) Provide “close service” and lead peers in channel service. Such as helping dealers get customers, building information management system, assisting in a series of marketing activities, etc; 3) Adopt the mode of “selling real estate and producing area research”. Through this mode, the company realizes the efficient and stable delivery of new products to the market, saves logistics costs, improves channel efficiency and further improves market share; 4) According to the market maturity and channel structure characteristics of different regions, formulate different channel management strategies to ensure that dealers in different regions get the best sense of service experience. 5) Enter the prefabricated vegetable market, help dealers transform and upgrade from a professional to a platform to a terminal, and bring broader profit space for dealers.
Roe is ahead of its peers, and the cost rate still has room for improvement. From 2017 to 2020, the roe level of the company was 15%, 14.4%, 15.6% and 18.8% respectively. Compared with other companies in the same industry, the profitability of the company was ahead of its peers. The main reason was that the company achieved scale expansion by relying on strong channel force. The expansion of enterprise scale fully improved the efficiency of personnel, logistics and advertising, and promoted the decline of sales expense rate. Looking ahead, we believe that the company will still benefit from the scale effect and efficiency improvement, and there is still room for improvement in the cost rate.
Profit forecast: the dilution of capital stock by fixed increase will not be considered temporarily. We slightly adjust the previous profit forecast. It is estimated that the company’s net profit attributable to the parent company from 2021 to 2023 will be 702 / 961 / 1290 million yuan, a year-on-year increase of + 16.3% / 36.9% / 34.2%, corresponding to EPS 2.5% 87 / 3.93/5.28 yuan, corresponding to 48 / 35 / 26 times of PE, maintaining the “buy” rating.
Risk tip: the risk of rising costs, food safety risk, intensified market competition, and the promotion of new products is less than expected.
