Zhengzhou Qianweiyangchu Food Co.Ltd(001215) (001215)
The company announced that the product promotion policies of some quick-frozen rice flour products will be reduced or the distribution price will be increased by 2% – 10%. The new price will be implemented according to the price adjustment notice of each product from December 25, 2021.
This price increase: we expect the average price increase to be 5% – 6%. This price increase is mainly to deal with the continuous rise of raw materials, labor, transportation, energy and other costs. We expect that the customers involved are mainly small B customers. Large B customers will not raise prices collectively, and they need to negotiate the price increase after the expiration of the contract.
Impact of this price increase: it is estimated that this price increase has little impact on the company’s product sales. The prices of Sanquan and Anji have increased, and the market has certain psychological expectations; At the same time, the price increase will help alleviate the rising pressure of the company’s costs and stabilize the gross profit margin and overall profitability.
Profit forecast and investment suggestions:
Considering the continuous high growth of revenue in the first three quarters, adjust the revenue forecast for 2021-23 from RMB 1.22/15.7/2.03 billion to RMB 1.30/16.5/2.04 billion, with a year-on-year growth rate of 38% / 26% / 24%; Considering the reduction of government subsidies this year, the net profit attributable to the parent company in 2021-23 is adjusted from 97 / 128 / 168 million yuan to 92 / 121 / 158 million yuan, with a year-on-year growth rate of 20% / 32% / 30%. Previously, the company announced that the equity incentive plan granted 1568400 shares, and the unlocking conditions correspond to CAGR 26% of the revenue in 20-23 years, injecting sufficient power into the future business growth.
As a leading enterprise in the b-end market of China’s quick-frozen food catering, the company inherits the mantle of missing and becomes the core supplier of Yum China’s quick-frozen rice noodles, continuously expands Wallace, Haidilao and other big B customers, gradually explores the small B market, supports big dealers, is optimistic about the growth from big customer driven to category driven, and maintains the “buy” rating.
Risk tips: food safety and quality risks; Operation risk caused by “covid-19 epidemic”; Risk of intensified industry competition; Short term stock price fluctuation risk.
