\u3000\u3000 Shanghai Laiyifen Co.Ltd(603777) (603777)
The company focuses on direct sales, accelerates the layout of franchise stores, and the gross profit margin of each channel has increased steadily. The company is an all channel operator of leisure food with its own brand. Its products mainly cover 10 core categories such as nuts, fried goods, meat snacks, pastries and biscuits, with more than 800 products. The company focuses on directly operated stores, and the proportion of directly operated revenue will reach 76% in 2020. In 2021, the company accelerated the expansion of franchise stores, and the proportion of franchise business increased rapidly. Due to the high gross profit margin of Direct stores, with the increase of the proportion of franchisees and other channels, the gross profit margin of the company decreased reasonably, but the gross profit margin of each channel increased steadily.
Leisure food still has high growth space and growth rate. From 2015 to 2020, China’s five-year CAGR of leisure snacks was 12%, but the per capita consumption was less than half that of Japan, about 1 / 6 of that of the United States. Compared with Japan, China’s leisure food scale is expected to maintain a high growth rate in the next 30 years. Among them, leisure brine products, baked pastries and nuts are growing rapidly. Leading enterprises have the advantages of raw material sources, R & D and channels. With the improvement of snack consumption on product quality and diversity, the market share of the industry is expected to further concentrate on leading enterprises. Listed companies of A-share snack food have focused on high growth tracks such as nut speculation.
The company actively complies with the development trend of the industry and waits for a breakthrough through multiple approaches:
The company focuses on developing franchise business. Expanding stores through franchising is conducive to obtaining advantageous points, adapting to local development and accelerating the speed of expanding stores. The company is rapidly expanding its franchise business, including accelerating the opening of stores in the second half of the year. It is expected to add about 600 franchise stores this year. Assuming that the company opens 800 new franchise stores in 2022, the income of each store is 80% of the income level of Suzhou, and the gross profit margin of the company’s franchise wholesale is reduced to 15%, it is estimated that the new 800 franchise stores can bring 506 million yuan of operating revenue and 75.84 million yuan of gross profit to the company.
Improve the income level of single store in various ways: (1) focus on regions with strong consumption ability and vigorously develop franchise business in Jiangsu and Guangdong. The poor performance of Shanghai Laiyifen Co.Ltd(603777) in the past few years is mainly due to the gradual saturation of stores in Shanghai, the low efficiency of opening stores outside Shanghai and the low income of single stores. In the future, Shanghai Laiyifen Co.Ltd(603777) will focus on relatively developed regions such as Jiangsu and Guangdong, and the average single store income is expected to increase.
(2) community drainage to improve the income of single store. At present, the company mainly promotes the community group business through Shanghai direct stores, takes Shanghai Laiyifen Co.Ltd(603777) app as the main traffic entrance, explores the interaction with customers through the enterprise wechat community, and finally directs customers to the pick-up point of offline Direct stores. We believe that community group buying can drain the stores, increase the repurchase rate and improve the income level of single stores.
(3) there is room for improvement in the single store model. The floor efficiency of Shanghai Laiyifen Co.Ltd(603777) Direct stores is equivalent to that of Bestore Co.Ltd(603719) , but the area of Shanghai Laiyifen Co.Ltd(603777) stores is small, so the income of single stores is low. If the area of single stores can be appropriately increased, although it has a slight impact on the floor efficiency, the income and profit of single stores are expected to increase.
Profit forecast and suggestions: it is predicted that the company’s revenue from 2021 to 2023 will be 4.241/50.05/5.463 billion yuan respectively, with a year-on-year increase of 5.33% / 18.01% / 9.16% respectively; The net profit attributable to the parent company was 24 / 27 / 71 million yuan respectively, with a year-on-year increase of 136.76% / 13.02% / 163.23%. From 2021 to 2023, the corresponding PE was 173 / 153 / 58 times and the corresponding peg was 1.26/11.74/0.36 times respectively. For the first coverage, give a “recommended” rating.
Risk warning: the development of group purchase business and franchise business of the company is not as expected; The effect of selling expenses is not as good as expected; In the post epidemic period, the overall consumption level decreased; Product quality risk.
