\u3000\u3 Bohai Water Industry Co.Ltd(000605) 499 Eastroc Beverage (Group) Co.Ltd(605499) )
The company issued the 2021 annual report. The company achieved an operating revenue of 6.98 billion yuan, a year-on-year increase of + 40.7%, a net profit attributable to the parent company of 1.19 billion yuan, a total ratio of + 46.9%, and a deduction of non attributable net profit of 1.08 billion yuan, a year-on-year increase of + 34.7%. Q4 achieved a revenue of 1.42 billion yuan in a single quarter, a year-on-year increase of + 55.0%; The net profit attributable to the parent company was 200 million yuan, a year-on-year increase of + 82.3%; The net profit deducted from non parent company was 120 million yuan, a year-on-year increase of + 13.1%.
High revenue growth and high-quality promotion of nationalization. In 2021, the company achieved revenue of RMB 3.20/3.76 billion in Guangdong / non Guangdong regions respectively, with a year-on-year increase of + 29.7% / 52.5% respectively, and the proportion of market revenue outside the province increased to 54.1%. Among them, the growth rate of East China, Southwest China and online channels was significantly faster than the overall level of the company, with revenue of RMB 7.7/4.3/110 million respectively, with a year-on-year increase of + 79.1% / + 65.4% / + 88.4% respectively. The development of key markets was fruitful. From the perspective of channel side, there was a net increase of 712 to 2312 dealers in the whole year, among which the number of dealers in North China, Southwest China and direct and online channels increased significantly. From the perspective of average sales of dealers, Guangdong / East China / Central China / Guangxi / Southwest / North China were 1285 / 292 / 211 / 699 / 115 / 550000 yuan respectively, with a year-on-year increase of - 1.1% / + 60.1% / + 10.8% / + 21.5% / + 11.3% / - 17.0% respectively, The nationalization of the company shows a good trend of channel expansion (high increase in the number of dealers) + synchronous increase in single business sales.
The cost side drives the short-term pressure on the gross profit margin, and many factors improve the profitability of the company. In 2021, the gross profit margin of the company's sales was 44.4%, with a year-on-year increase of + 0.5pct. Due to the change of accounting standards, excluding the impact of freight, the gross profit margin in 2021 was + 0.7pct to 47.3% year-on-year, and 42.8% in the single quarter of 2021q4, with a year-on-year increase of -2.9pct, mainly due to the rise of raw material costs. At present, the prices of pet and white granulated sugar are still lower than those in 2018. Considering that the growth rate of annual revenue in 2018 is only 6.8%, We believe that the high growth of revenue in 2022 will significantly offset the cost pressure. At the same time, the company has rich cost control and operation for many years, and the annual performance is expected to exceed the market expectation. In 2021, the sales expense ratio was 19.6%, with a year-on-year increase of + 1.4pct and a year-on-year increase of + 51.3%, which was mainly due to the impact of the marketing expenses of 99.42 million yuan. If excluded, it was + 40.32% year-on-year. The increase of the sales expense ratio offset the impact of the increase of the gross profit margin. The company deducted 15.5% of the non parent net profit margin, with a year-on-year decrease of - 0.7pct, and the parent net profit margin was 17.1%, with a year-on-year increase of + 0.7, The high increase in net profit attributable to the parent company mainly benefited from the impact of the income from changes in fair value in the current period (accounting for 1.7% of revenue). This part of the project is the company's 3.16 billion financial management and private investment.
Looking forward to 2022, the leading Dongpeng is expected to continue its high growth, and its growth can be seen in three dimensions. According to the annual report, from the perspective of sales volume, Dongpeng has become the industry dragon one (31.7%) and the industry dragon two (23.4%) in 2021. We believe that Dongpeng's growth comes from three aspects: 1) brand and product power first. Dongpeng 500ml gold bottle products take the lead in solving consumers' pain points through high-capacity and cost-effective + PET bottles, adding long-term brand publicity investment to enhance consumers' product awareness, driven by both product power and channel power. 2) The channel and market potential are still large. At present, the number of terminals of the company exceeds 2.09 million, which still has a large development space compared with red bull's 4 million sales outlets. At the same time, the core market in the province maintains a high growth (year-on-year + 29.7%), the company also actively takes land to build supporting capacity, and the market in the province also has great potential; 3) Multi category development is expected to explore the second growth curve. In the past, Red Bull adopted a single product strategy in China and made few attempts in terms of taste and specifications. Dongpeng has launched energy drinks such as aerated, Zero sugar and taneng in recent years, which are respectively targeted at young, white-collar workers and women. At the same time, oil citrus products represented by oil citrus lemon tea are quite unique. The company has been committed to finding and trying the second growth curve, It is expected to contribute to new growth in the future.
Profit forecast and valuation analysis: slightly adjust the previous profit forecast and introduce it into 2024. It is estimated that the operating revenue of the company from 2022 to 2024 will be RMB 88.6/107.3/12.62 billion respectively (originally RMB 86.9/10.46 billion), a year-on-year increase of + 27.0% / 21.1% / 17.6%; The net profit attributable to the parent company was 1.52/1.95/2.4 billion yuan respectively (originally 15.4/19.4), a year-on-year increase of + 27.5% / 28.4% / 22.7%, corresponding to 45 / 35 / 28 times of PE. We are optimistic about the high growth brought by the company's continuous promotion of nationalization and maintain the "buy" rating.
Risk tip: the national expansion is less than expected, the cost rise is more than expected, and the promotion of new products is less than expected.
