\u3000\u3000 Yihai Kerry Arawana Holdings Co.Ltd(300999) (300999)
Event: on February 22, the company released the 2021 annual performance express. It is estimated that the annual revenue will reach 226.225 billion yuan, a year-on-year increase of + 16.10%; Q4 achieved a revenue of 63.5 billion yuan, a year-on-year increase of + 15.61%. It is estimated that the annual net profit attributable to the parent company will be 4.132 billion yuan, a year-on-year increase of - 31.10%; Q4 realized a net profit attributable to the parent company of 451 million yuan, a year-on-year increase of - 50.55%. The basic EPS in 2021 is 0.76 yuan.
The steady growth of main business income, rising costs and intensified competition dragged down the overall profit performance. The company's main business revenue maintained a steady growth in 2021, mainly due to: (1) after the normalization of epidemic prevention and control, the recovery of catering channels led to the recovery of demand, and the scale of main business revenue and sales increased. (2) The company raised the price of some products and thickened the scale of revenue. The profit side fell year-on-year due to the comprehensive impact of rising raw material costs, intensified market competition, sluggish dynamic sales of high-end products and other factors. The company expects to realize a net profit of RMB 4.996 billion in 21 years, a year-on-year increase of - 43.2%. The reason why the decline of net profit after deduction is higher than that of net profit attributable to the parent company is that the non recurring losses generated by derivative financial instruments in the current period that do not fully meet the requirements of hedge accounting are reduced.
The rising cost of raw materials combined with the rising proportion of products with low gross profit margin dragged down the profits of kitchen food business. In 2021, the sales volume and revenue of the company's kitchen food business increased year-on-year, but the profit decreased year-on-year. The main reasons are as follows: (1) the epidemic situation in China has been effectively controlled, the catering market has recovered, and the dynamic sales of catering channels have recovered, which has helped the steady growth of the income of the kitchen food sector. (2) The cost of kitchen food raw materials increased significantly year-on-year. Although the company raised the selling price of some products, it still could not cover the upward range of costs, resulting in a year-on-year decrease in profits. (3) The sales volume of the company's medium and high-end kitchen retail products has been affected by the intensification of market competition and the superposition of factors such as weak consumption. (4) Among kitchen products, the sales volume of catering channel products with low gross profit margin increased, further reducing the overall gross profit margin.
The reduction of soybean procurement and crushing volume and the superposition of hedging losses dragged down the profits of feed raw materials and oil technology business.
In 2021, affected by the rising market, the income and profit of feed raw materials and oil technology business increased year-on-year, among which the profit of oil technology business increased significantly. Affected by the sharp rise in soybean prices, the company's soybean procurement and crushing volume decreased year-on-year in 2021, and the crushing profit decreased year-on-year. On the other hand, the loss of derivative financial instruments of hedging soybean related business dragged down the profits of related business segments. However, the above losses are caused by the necessary measures taken by the company to avoid the risk of price fluctuation of raw materials in the process of normal production and operation, and are normal business activities.
Investment suggestion: according to the performance express, we slightly adjust the profit forecast. It is estimated that the company will achieve a revenue of 226.225/257.74/290.237 billion yuan and a net profit attributable to the parent company of 4.132/76.77/8.923 billion yuan in 21-23 years, equivalent to 0.76/1.42/1.65 yuan of EPS respectively. At present, the stock price corresponds to 75 / 40 / 35 times of PE in 21-23 years. At present, the company's valuation in 2022 is slightly lower than 45 times the overall level of the seasoning sector (wind unanimously predicted that CITIC industry). The company is a leading enterprise in the kitchen food industry. Edible oil, rice noodles and other products have strong scale advantages and brand effect. In the future, the company's new capacity will continue to be put into operation, and will actively expand relevant product categories, with good medium and long-term growth. To sum up, maintain the "recommended" rating.
Risk tips: industry competition intensifies, cost rises exceed expectations, food safety problems, etc
