He Bei Cheng De Lolo Company Limited(000848) (000848)
As the pioneer of China's vegetable protein beverage industry and the leader of almond dew sub category, He Bei Cheng De Lolo Company Limited(000848) promotes the sustainable development of the company through a number of positive changes, is expected to usher in performance improvement, and gives a buy rating for the first time.
Key points supporting rating
Plant protein beverage conforms to the trend of healthy consumption, and the industry scale continues to increase. In the new era, the consumer's concept of food and drinks has changed, and dietary nutrition and health have been paid more and more attention. Plant protein drinks not only have nutritional value, but also have diversified tastes, and the demand continues to increase. In 2019, China's output of plant protein beverage reached 8.8 billion liters, with a compound growth rate of more than 9% from 2014 to 2019, and the industry scale continued to improve.
He Bei Cheng De Lolo Company Limited(000848) is a classic brand of plant protein beverage. Under the leadership of the new management, it has made many changes and developed for the better as a whole. The company is a leading enterprise in the production of plant protein drinks and the largest manufacturer of almond dew in China. It has a good reputation and strong brand power. At the same time, the company is in good operation, its profitability continues to improve and its fundamentals are stable. In recent years, the company has experienced many senior management changes, and the new management has made a number of changes, striving to achieve comprehensive improvement in products, brands, marketing, channels and management, so as to drive performance improvement. (1) In terms of products, the company has launched diversified products for different consumer groups, distinguishing them in terms of packaging, formula and pricing. In 2021, the company strengthened R & D investment, and the R & D investment in 1h21 increased by 98% year-on-year. In the future, the company will launch products for the personalized needs of young consumers, and further study the compliance of sugar free, lipid-lowering, low calorie and compound high protein Health concept products. (2) In terms of marketing promotion, the company has carried out all-round and multi-level marketing activities for the younger generation of consumers to enhance the interaction with consumers and improve the brand image through advertising, event sponsorship, live broadcasting and delivery. 1h21's advertising and publicity expenses increased by 45.4% year-on-year. (3) In terms of channels, the company has intensively cultivated the existing market, improved channel penetration and terminal market coverage, continuously strengthened the construction of online channels and accumulated online fans, so as to further improve online sales. In 2020, the company's online sales were close to 33 million yuan, an increase of 34.2% over the same period. (4) In terms of sales area expansion, there is a large blank area in the southern market. The company will gradually start the layout and investment promotion in the southern region, strengthen product R & D and strive to achieve a breakthrough. (5) In terms of talent team construction, the company has completed the share repurchase, and will cooperate with the equity incentive plan to introduce medium and high-end talents with rich experience and professional knowledge to improve the management level of the company.
Valuation and investment rating
The company is the pioneer of China's plant protein beverage industry and the leader of almond dew sub category, with good reputation and strong brand strength. In recent years, the company has carried out a number of positive reforms. We are optimistic about the rising track of the company's performance. It is predicted that the company's earnings per share will be 0.51, 0.63 and 0.78 yuan in 21-23 years, with a year-on-year increase of + 25.9%, 25.0% and 24.0%. We believe that the current valuation of the company is in a reasonable range, and the buy rating is given for the first time.
Main risks of rating
New product development is not as expected; Market expansion is less than expected; The impact of the epidemic exceeded expectations; Uncertainty of trademark litigation.
