\u3000\u3 Shengda Resources Co.Ltd(000603) 317 Sichuan Teway Food Group Co.Ltd(603317) )
Event:
Sichuan Teway Food Group Co.Ltd(603317) issued the incentive plan for restricted shares in 2022. It is proposed to grant a total of 11.97 million shares of restricted shares to 237 directors, senior managers, middle managers and technical backbones of the company, accounting for about 1.59% of the total share capital of the company. The granting method is to issue A-share shares to the granting object, the granting price is 10.96 yuan / share, and the unlocking condition is based on the revenue of 21 years, The revenue growth rate in 22 and 23 years was 15% and 32.25% respectively, and the year-on-year growth rate was 15% and 15% respectively.
Comments:
Wide incentive coverage and large number of awards. The incentive plan intends to grant a total of 11.97 million restricted shares to 237 directors, senior managers, middle managers and technical backbones of the company, accounting for about 1.59% of the total share capital of the company, of which vice presidents Yu Zhiyong, Wu Xuejun, Shen Songlin and he Changjun respectively grant 33, 38, 300 and 300000 shares, and other middle managers and technical backbones respectively grant 8.66 million shares, Accounting for 1.15% of the total share capital of the company. 1) In terms of the number of people granted, the number of people granted this time is 237, far exceeding 176 in 20 years and 140 in 21 years. 2) In terms of the number of shares granted, the number of shares granted this time is 11.97 million, accounting for about 1.59% of the total share capital, while the total number of 20-year options + shares is 7.3 million, accounting for 1.22%, and the number of 21-year options + shares is 2.1 million, accounting for 0.28%. The number of shares granted this time is far ahead of two periods. Both in terms of the scope and quantity of awards, this time has been expanded, reflecting the company’s desire and attention to talents.
The goal is more pragmatic and the decision-making style is gradually changed. The unlocking condition of this equity incentive is that based on the revenue of 21 years, the revenue growth rate of 22 and 23 years is 15% and 32.25% respectively, and the year-on-year growth rate is 15% and 15%. Compared with the previous two goals, this goal assignment is more pragmatic and stable. On the one hand, it shows the determination of the company to change. Since 21h2, the company’s strategy has gradually changed from achieving the sales goal to focusing on the freshness of product date and the health of channel inventory, which makes the strategy more stable and sustainable. On the other hand, it also strengthens the confidence of the middle-level. Practical goals are conducive to retaining talents and achieving goals together.
22 year Outlook: inventory clearing meets the turning point, and the second recovery is waiting for flowers to bloom. 1) Revenue: on the one hand, according to the research of channels, terminals and companies, we believe that the company’s de inventory action has ended, and the strategic focus is more focused on date freshness and inventory health. In the future, the company’s channels are expected to enter a virtuous circle; On the other hand, consumption is expected to stabilize gradually in the future. Under the triple action of low inventory, stable consumption and low base, the company’s revenue is expected to gradually return to the fast lane of growth. 2) Profit: in the future, with the gradual emergence of scale advantages, the fixed type expense rate is expected to gradually decline, and the profit elasticity can be expected under the low base. However, considering that the cost pressure is significantly higher than that in 20 years, we expect that it will be difficult for the profit to return to the 20-year level.
Future outlook: the industry will accelerate the liquidation, the leading enterprises are expected to benefit, and equity incentive will enable them. The future market space of the compound condiment industry is huge. At present, it is still in the early stage of industry development, and there are many participants in the category. In the past 21 years, due to the impact of sluggish demand in the consumer industry and community group purchase, compound condiment enterprises have also experienced a wave of clearing, and small enterprises have withdrawn passively. Enterprises with financial strength, product strength and brand strength, such as Tianwei and Yihai, are expected to benefit from it. At the same time, the equity incentive of the company is expected to be implemented in 22 years, so as to ensure the competition of enterprises and the high-speed and high-quality development of enterprises in terms of mechanism.
Profit forecast and rating: the company is in the golden period of the development of compound condiments, and the track is excellent. After 21 years of industry development difficulties, the industry liquidation has accelerated. We are optimistic about the company’s core competitiveness and development potential. In the short term, with the end of channel liquidation, the consumption has gradually stabilized, superimposing the 21-year low base, the company is expected to usher in a wave of high-quality growth, At the same time, equity incentive has locked the bottom line of revenue growth. Without considering the equity incentive expenses, we expect the company’s revenue growth rate to be – 14%, 23% and 20% respectively from 2021 to 2023, and the profit growth rate to be – 50%, 72% and 39% respectively, corresponding to EPS of 0.24 yuan, 0.41 yuan and 0.57 yuan respectively. We give 65x valuation according to the performance in 2022, and the target price for one year is 26 yuan, maintaining the “overweight” rating of the company.
Risk warning: price fluctuation of raw materials; Deterioration of sales environment; The cost of raw materials is rising rapidly; Food safety issues.
