\u3000\u3 Shengda Resources Co.Ltd(000603) 027 Qianhe Condiment And Food Co.Ltd(603027) )
Event:
Qianhe Condiment And Food Co.Ltd(603027) issued the incentive plan for restricted shares in 2022, which plans to grant a total of 4.59 million shares of restricted shares to 73 directors, senior managers, middle managers and core backbone of the company, accounting for about 0.575% of the total share capital of the company. The granting method is to issue A-share shares to the granting object at a price of 9.79 yuan / share, Unlocking conditions are one of two conditions: 1) based on the revenue of 21 years, the revenue growth rate in 22, 23 and 24 years is 18%, 38% and 60% respectively, with the same increase of 18%, 17% and 16% respectively; 2) The net profit of 21 years (excluding fees and charges) is the base, and the net profit of 22, 23 and 24 years (excluding fees and charges) increases by 50%, 90% and 130%, with the same increase of 50%, 27% and 21% respectively.
The company issued a non-public offering plan. This non-public offering was fully subscribed by the controlling shareholder and actual controller, Mr. Wu Chaoqun. The total amount of funds raised was between 500800 million, the issuance price was 15.59 yuan / share (20% discount), the number of shares issued did not exceed 30% of the company’s share capital before the issuance, and all the funds raised were used for the seasoning manufacturing project with an annual output of Shanghai Pudong Development Bank Co.Ltd(600000) tons.
Comments:
Combing the previous incentives, the boots finally landed. Since the establishment of the company, there have been three equity incentives, namely 11 years, 17 years and 22 years. 1) The first time was before the listing (11 years). The company established the ESOP platform Meishan Tiandao and Meishan eternal way to motivate senior managers, middle managers and core backbones. The total shareholding of the ESOP platform accounted for 5.32%. 2) The second time was shortly after the listing (17 years). Equity incentives were given to 108 core employees of the company in the form of restricted shares, including senior managers, middle-level and core backbone. The shares granted accounted for 1.97%. The income and profit target for 17-20 years was indirectly set. Finally, the company’s income increased from 770 million in 16 years to 1.69 billion in 20 years, an increase of 120%, The net profit of deducting and non deducting fees increased from 88 million in 16 years to 200 million in 20 years, with an increase of 131%. According to the achievement of each year, the company has reached the unlocking conditions in four years, including income unlocking in three years and profit unlocking in one year. 3) The third time is this time. This incentive has been five years since the last time. The last incentive cycle has been completed, and the company’s managers and technicians have changed to some extent. The company needs a new round of equity incentive to retain employees and lock in future goals.
The incentive is firm and the bottom line of the future is locked. This incentive plan grants a total of 4.59 million restricted shares to 73 senior managers, middle managers and core backbones, accounting for about 0.575% of the total share capital of the company. This incentive group and the number of grants are reduced compared with the last time, but the core personnel are involved, which also reflects the relatively strong stability of employees. The unlocking conditions for this time are the revenue growth rate of 18%, 17% and 16% in 22-24 years, and the net profit growth rate of deducting and non deducting expenses of 50%, 27% and 21%. The conservative goal reflects the determination to realize the incentive and provides the target bottom line for the future. According to the completion of the last incentive, we believe that the company is expected to successfully complete the incentive this time.
The non-public development behavior is to raise funds for capacity expansion in the early stage. The company announced the capacity expansion plan in October of 19 and the capacity adjustment plan in November of 20. The company plans to add Shanghai Pudong Development Bank Co.Ltd(600000) tons of condiment capacity, with the required capital of 1.26 billion, all of which are self raised. This non-public development is the fund-raising of the last capacity expansion plan. After the capacity expansion is completed, the company will have a capacity of 1.105 million tons, including 820000 tons of soy sauce, 155000 tons of cooking wine and 130000 tons of vinegar. The capacity expansion will reach the production capacity at the end of 22 and 24 respectively, including 200000 tons of soy sauce and 100000 tons of cooking wine at the end of 22 and 300000 tons of soy sauce at the end of 24, At that time, it will provide strong support for the company’s market expansion.
Company outlook: the short-term consumption will stabilize, and the medium-term product and channel volume can be expected. (1) 22 years: with the gradual stabilization of consumption and the end of the impact of community group purchase, sales are expected to achieve high growth this year, the reaction of price increase superposition cost is slower than and less than that of peers, and the profit elasticity is expected to be large. (2) Medium term: the company’s future logic: product side: the company’s product positioning is medium and high-end, adheres to zero addition products as the core, and arranges medium-end products such as high freshness and extremely delicious according to consumer demand, as well as future products such as enzyme soy sauce and flavored soy sauce in advance. With the gradual deepening of the general trend of consumption upgrading, the company is expected to benefit from it; Channel side: on the one hand, with the nationwide laying of business supermarket channels, on the other hand, with the development and intensive cultivation of traditional channels, the company’s sales are expected to be large. Incentive: encourage and retain talents, lock in the bottom line of medium-term goals, and is expected to stimulate the vitality of the enterprise.
Profit forecast and rating: we are optimistic about the development trend of high-end soy sauce market. With the entry of Yihai Kerry Arawana Holdings Co.Ltd(300999) , Luhua and other leaders, the leaders are expected to jointly cultivate consumers, and the growth rate of high-end condiments is expected to reach a new level. At present, the industry structure is still scattered, the proportion of leading cities is expected to gradually increase in the future, and the company’s cultivation of high-end condiments for many years is expected to benefit from it. In the medium term, the company’s products and channels are expected to be large-scale, and equity incentives lock the bottom line of the company’s business growth. Regardless of the impact of equity incentive fees and the issuance of additional diluted share capital, we expect the company’s revenue to be 1.9 billion, 2.3 billion and 2.8 billion yuan respectively in 21-23 years, with a year-on-year increase of 12%, 23% and 20%, and the net profit attributable to the parent company to be 210 million, 320 million and 410 million yuan respectively, with a year-on-year increase of 4%, 50% and 30%. We give the company a one-year target price of 28 yuan according to 70X in 22 years, Maintain the company’s “buy” rating.
Risk warning: price fluctuation of raw materials; Deterioration of sales environment; The cost of raw materials is rising rapidly; Food safety issues.
