\u3000\u3000 Ligao Foods Co.Ltd(300973) (300973)
Leader in freeze baking industry
The refrigeration industry is in the stage of rapid penetration improvement, Ligao Foods Co.Ltd(300973) building obvious first mover advantages in products, channels and technology. We expect the net profit attributable to the parent company to be RMB 277 million, RMB 359 million and RMB 510 million from 2021 to 2023, with a year-on-year increase of 19.2%, 29.7% and 42.2%, and the current price corresponds to 66.9, 51.6 and 36.3 times of PE from 2021 to 2023. The short-term cost pressure is still large, and the "overweight" rating is given for the first time.
The baking track is high-quality, and frozen baking is in the ascendant
In 2020, the sales volume of China's baking industry was 235.8 billion yuan, with a long-term stable growth of about 10%. Baking consumption in China is still relatively low, about 1/4 in China's Hongkong and Taiwan China. With the urbanization, consumption upgrading and the rising of young consumer groups, the baking industry demand is expected to continue to rise. In recent years, with the process improvement and technological progress, freeze baking has effectively solved the pain points of multi products and high cost in the industry through standardized process and large-scale production, and gradually showed the trend of large-scale development. Frozen baking has a penetration rate of less than 10% in China and is in the early stage of development. In the long run, with technological progress, leading expansion and downstream cost pressure, the penetration rate is expected to continue to increase, and the spatial certainty of long-term replacement of frozen baked foods is high.
The frozen baking industry is expected to show stronger growth
Compared with the leader Fu Jian Anjoy Foods Co.Ltd(603345) of quick-frozen meat products and rice flour products, the underlying logic of their development is similar. Semi-finished products and finished products meet the development trend of large-scale and standardization of the industry. The leader is expected to move forward from a regional company to a national company in the future. Frozen baking is in the stage of insufficient supply and rapid increase in penetration. At the same time, the industry competition is not sufficient and most enterprises are still small. It is expected to show stronger growth driven by leading companies in the future.
Ligao Foods Co.Ltd(300973) has obvious first mover advantages in technology, products and channels
Frozen baking products are diverse and have a high technical threshold, which requires continuous R & D investment and R & D capacity, so the viscosity of customers is higher. Ligao Foods Co.Ltd(300973) has large-scale mass production technology, automatic production equipment customization ability, and many mature product formulas. At the same time, because the downstream baking channels are relatively scattered, Ligao Foods Co.Ltd(300973) takes the lead in the industry by relying on the brand popularity at the C-end and the ability of fine sales promotion and personal service. On the whole, Ligao Foods Co.Ltd(300973) has an earlier layout, built barriers in customer stickiness and technology, and has a more obvious first mover advantage.
Risk warning: high customer concentration risk and rapid rise of raw material price risk
