\u3000\u3000 Qianhe Condiment And Food Co.Ltd(603027) (603027)
Event: Qianhe Condiment And Food Co.Ltd(603027) disclosed the 2022 non-public Development Bank A-share stock plan, raised a total of no less than 500 million yuan and no more than 800 million yuan from the controlling shareholder, actual controller and Chairman Wu Jianyong, and the issue price was 15.59 yuan / share, corresponding to 32.07-51.31 million shares. At the same time, the restricted stock incentive plan for 2022 (Draft) is disclosed. The number of restricted shares to be granted is 4.59 million, accounting for 0.575% of the total share capital of the company. The grant object is 73 people including directors, senior managers, middle managers and core backbone, and the grant price is 9.79 yuan / share.
Issue a seasoning project with an annual output of 600000 tons by raising funds, further improve the production capacity and accelerate the process of nationalization. The net amount raised by the fixed increase project after deducting the issuance expenses is intended to be used for the “intelligent manufacturing project of seasoning with an annual output of 600000 tons”. After the completion of the project, it is expected to increase the production capacity of brewing soy sauce with an annual output of 500000 tons and cooking wine with an annual output of 100000 tons, which is expected to achieve a revenue of 3.313 billion yuan and an annual net profit of 634 million yuan. According to the announcement on November 14, 2020, the construction period of the project is five years. It is expected to be completed in December 2024. The first phase will complete the construction of 200000 tons of soy sauce and 100000 tons of cooking wine production line, and the second phase will complete the construction of 300000 tons of soy sauce production line. If the production rate of most projects in the industry is 30% / 60% / 100% in the first three years, Qianhe will have a production capacity of about 1158000 tons in 2026, including 820000 tons of soy sauce, 183000 tons of vinegar and 155000 tons of cooking wine. The production capacity has been greatly increased, with a CAGR of 19% from 2020 to 2026, which has helped to accelerate the nationalization of Qianhe and further promote the sinking of channels.
The high increase of dividend incentive target reflects the growth confidence of the company. The assessment conditions for the lifting of sales restrictions in this incentive plan are: the year-on-year growth rate of revenue in 2022-2024 is no less than 18% / 38% / 60% in 2021, the corresponding growth rate of revenue in 2022-2024 is 18% / 17% / 16%, and the CAGR of revenue in three years is 17%; Or the year-on-year growth rate of net profit (excluding fees) from 2022 to 2024 shall not be less than 50% / 90% / 130%, corresponding to the growth rate of net profit (excluding fees) from 2022 to 2024 is 50% / 27% / 21%, and the CAGR of three-year net profit (excluding fees) is 32%. The target setting is high, which reflects the company’s affirmation of its own channel development and confidence in growth. The growth rate of net profit far exceeds the growth rate of revenue, and the net interest rate is expected to continue to rise.
Under the scale effect + national development, the net interest rate maintained an upward trend. According to the calculation, according to the equity incentive target, the net interest rates after deducting and non deducting fees from 2022 to 2024 are 13.8% / 15.4% / 16.5% respectively, which maintain the improvement trend, mainly due to: 1) supporting the release of production capacity, the scale effect of the company’s production end and consumption end continues to improve; 2) The proportion of zero added products with high gross profit margin increased, which promoted the rise of profit margin; 3) With the expansion of the company’s basic market, the drag of the company’s current and future new products in the new area on the company’s overall net profit will be reduced.
Investment suggestion: the company’s earnings per share from 2021 to 2023 are expected to be 0.28/0.39/0.51 yuan respectively. It is given a Buy-A investment rating and a six-month target price of 23.39 yuan, which is equivalent to the dynamic P / E ratio of 60x in 2022.
Risk tips: macroeconomic and policy risks, food safety issues, national development less than expected risks, and yield less than expected
