Juewei Food Co.Ltd(603517) (603517)
Key investment points:
Leisure flavor: there is still room for expansion in the scale of RMB 100 billion, and the industry concentration is expected to increase. In 2019, the market scale of China's leisure brine food has exceeded 100 billion, and the CAGR from 2014 to 2019 was 20.3%, which is one of the fastest growing segments of the leisure food industry. As the brand leisure flavor company continues to promote channel sinking and market development, accelerate the iteration of product innovation, and continuously improve the per capita consumption expenditure, the expansion space of leisure flavor market is still broad. At present, the concentration of leisure brine market is not high, and Cr5 is less than 20%. The head brand has established obvious advantages in large-scale production, supply chain and brand strength. Under the background of the improvement of consumer brand awareness and the tightening of food safety supervision, the head brand is expected to accelerate the harvest of market share and promote the further improvement of industry concentration.
Franchised stores have excellent model design and outstanding advantages in operation management and supply chain. Juewei single store model has excellent design, with the characteristics of small initial investment, sufficient profit space, low operating expenses, high operating stability and short investment payback period of franchisees. It has strong attraction to franchisees. With the help of franchisees' asset leverage, the company can rapidly expand stores throughout the country and realize horse racing enclosure. The management of franchise system is an important link in the development of juewe chain business. The company regards franchisees as a community of destiny, strictly selects franchisees, cooperates stably with core franchisees with high-quality resources, and the average number of points brought by a single franchisee has increased. Juewe's strong supply chain capability builds the company's core barriers: the purchasing end has obvious scale advantages, has the ability to negotiate with upstream suppliers, and can stabilize cost fluctuations through hoarding; The production side has completed the layout of national chemical plants, and the production capacity will be expanded orderly in the future, providing strong support for the further expansion of the company's stores and the outsourcing of supply chain capacity. The construction of automation, informatization and intelligence will continue to be promoted, and the production efficiency is expected to be further improved; The logistics distribution capacity is outstanding and surplus. The company established Shanghai perfect flexible supply chain service Co., Ltd. to create a flexible supply chain system. In the current period, it has been able to provide cold chain fresh daily distribution services for invested companies and other cooperative enterprises and contribute to performance increment.
The main business has a solid foundation, and the second and third growth curves open up growth space. 1. Deep cultivation of the main business: we expect the number of Jue Wei stores to be more than 20000, and there is still room for nearly doubling the number of stores at present. While appropriately accelerating the pace of opening stores, the company also attaches importance to the improvement of single store revenue. In the future, the company will continue to drive the growth of single store revenue by strengthening store sales management, enriching marketing means and improving brand image. In addition, Jue Wei continues to promote the refinement of supply chain management, which will further reduce costs and improve efficiency. 2. Extension and expansion: focusing on the strategy of "deeply cultivating duck neck main business and building food ecology", the company expands its business boundary in stages and steps. At present, the food ecosystem has been laid out by means of "industrial investment + value-added services", a series of food brand matrices have been created, and supply chain services have been opened to the outside world. In the future, the outsourcing of supply chain capacity will continue to contribute to the performance increment, and the ecological layout of food is expected to enter the harvest period.
Profit forecast and investment suggestions: we expect the total operating revenue of the company from 2021 to 2023 to be RMB 6.58/82.0/10.12 billion respectively, a year-on-year increase of + 24.7% / + 24.6% / + 23.4%; The net profit attributable to the parent company was RMB 1.12/12.2/1.48 billion respectively, with a year-on-year increase of + 59.3% / + 9.5% / + 20.6%; EPS is 1.82/1.99/2.40 yuan / share respectively. Considering the company's outstanding core competitive advantage, continuous upward brand potential and large long-term growth space, it is given 35-40 times PE in 22 years, with a reasonable range of corresponding stock price of 69.7-79.6 yuan, maintaining the "recommended" rating.
Risk tips: food safety risks; Risk of intensified industry competition; Fluctuation risk of foreign investment income; The price of raw materials is subject to significant upward risk; Epidemic impact risk.
