\u3000\u3000 Chacha Food Company Limited(002557) (002557)
Events
On the evening of February 22, 2022, the company released the performance express of 2021: the company’s revenue in 2021 was 5.985 billion yuan, an increase of 13.15% at the same time; The net profit attributable to the parent company was 930 million yuan, an increase of 15.52% at the same time; Deduction of non RMB 800 million, an increase of 16.15% at the same time.
Key investment points
In the fourth quarter, the price of some products increased by 8% – 18%
According to the performance express, the company’s 2021q4 revenue was 2.103 billion yuan, an increase of 28% at the same time; The net profit attributable to the parent company was 336 million yuan, an increase of 22% at the same time; Deduct RMB 310 million from non, with an increase of 32% at the same time. Compared with 11% of 2021q3 revenue and 14% of parent net profit, the company’s performance accelerated month on month improvement.
We believe that the performance is in line with expectations for the following reasons: 1) the company actively carries out organizational reform, stimulates organizational vitality, focuses on positioning and strengthens brand construction; 2) The company actively explores the channel intensive cultivation mode, builds the channel intensive cultivation information platform, defines the positioning of e-commerce channels, and constantly expands new channels and new scenes; 3) In mid and late October, the company adjusted the ex factory price of sunflower seed series products, pumpkin seeds and small and fragrant watermelon seeds. The price increase range of each category is 8% – 18%. The price implementation began on October 22, 2021. At present, the price increase effect is good; 4) Spring Festival peak shifting factors also have an impact.
Share repurchase is in progress, and channel intensive cultivation is in progress
The company issued a share repurchase plan in September 2021, which plans to repurchase 30-60 million yuan, and the repurchase price shall not exceed 60.16 yuan / share. As of January 31, 2022, the company has repurchased 547800 shares, accounting for 0.108% of the total share capital. The maximum repurchase price is 59.56 yuan / share, the minimum repurchase price is 52.0775 yuan / share, and the transaction amount is about 30 million yuan.
From November 2020, the company began to establish a digital marketing platform, recruit channel partners and expand terminals, hoping to incorporate the orders of the whole terminal network into the system. At present, about 120000 terminals have been incorporated into the channel intensive cultivation system. The channel intensive cultivation has a good effect on the coverage of vulnerable markets and improving the penetration rate. At present, the system is under continuous optimization in order to improve the output of a single store. In addition, the company has increased the layout of convenience stores, campus stores, community stores and other channels. Through the implementation of channel intensive cultivation, million terminal project and digital platform construction, the company actively promotes the channel layout of mother and baby stores, flower stores, fruit stores, office buildings, hotels and so on.
The 10 billion goal is not a dream, but a combination of categories and channels
The company’s sales in 2023 will be 10 billion yuan, including 6 billion yuan of melon seeds, 3 billion yuan of nuts and 1 billion yuan of leisure products. The goal of nut category is to make the daily nut category absolutely the first in the market in the next 2-3 years and continuously improve the market share of the company’s nut category.
The daily nut probiotics and oatmeal launched in July 2020 have a monthly sales volume of about 10 million yuan per single product; Rattan pepper melon seeds are about 15 million yuan a month. At present, there are still few cities for the company to launch new products, and the cities focused in the later stage will expand. The new marketing channels of caramel, melon peel and oolong are also well distributed, and the new marketing channels of caramel and oolong are also active in some cities.
In the organizational structure of the company, the early business division is adjusted into a category center, and the power of the business division is delegated to each category bu. The person in charge of category Bu is the person in charge of all channels of products; Sales Tiejun is divided into Guokui sales Tiejun and nut sales Tiejun. After the adjustment of the organizational structure, the flexibility of the company’s category Bu and sales Bu is stronger, and the organizational efficiency is greatly improved; From the perspective of internal operation, the synergy among category centers, e-commerce and sales has improved significantly, and the price synergy of various channels has also improved.
Profit forecast
We are optimistic about the efficiency improvement after the adjustment of the company’s organizational structure and the rapid development of new products and channels. It is expected that the EPS will be 1.83/2.14/2.50 yuan from 2021 to 2023, and the current share price corresponding to PE will be 29 / 25 / 22 times respectively. It will be covered for the first time and given a “recommended” investment rating.
Risk tips
Macroeconomic downside risks, the epidemic dragged down consumption, melon seed growth rate was lower than expected, nut growth rate was lower than expected, peak season sales were lower than expected, internal reform was lower than expected, etc.
