\u3000\u3 Shengda Resources Co.Ltd(000603) 317 Sichuan Teway Food Group Co.Ltd(603317) )
Key investment points
Event: the company issued an equity incentive announcement, which plans to grant 9.97 million restricted shares to 237 people including directors, senior managers, middle managers and technical backbones at the price of 10.96 yuan / share, accounting for 1.5% of the total share capital of the company 32%。
Incentives focus on income assessment, which is less difficult than the previous one. The assessment objectives of the two incentive periods are as follows: 1) based on the operating income in 2021, the revenue growth rate in 2022 shall not be less than 15%; 2) Based on the operating revenue in 2021, the revenue growth rate in 2023 will not be less than 32.25%. It is estimated that the revenue growth rate of the corresponding company from 2022 to 2023 will not be less than 15%. Compared with the 25% revenue growth rate in 2022 set in the previous equity incentive plan, the performance target has been reduced in terms of revenue growth rate and absolute value. At present, the compound condiment industry is still in the stage of slow recovery of consumer demand, high raw material costs and fierce brand competition. The reasonable setting of the company’s objectives is conducive to the smooth realization of equity incentive and fully mobilize the enthusiasm of the management.
Expand the scope of incentive objects and fully bind the middle-level interests. The coverage of this equity incentive increased from 140 to 237. The coverage was further expanded for middle-level employees who have an important impact on the development of the company, such as management and sales lines. The company will bind its future development with the interests of middle-level core personnel. On the one hand, it will stabilize the morale of the existing management team and improve its subjective initiative; On the other hand, it helps to stimulate the fighting spirit of front-line salespeople, quickly grab market share in the stage of horse racing and enclosure in the industry, and fully release the scale effect. From the incentive expense side, the total amortization expense of this incentive is 106 million yuan, of which 53.09 million yuan / 44.24 million yuan / 8.85 million yuan are accrued respectively from 2022 to 2024, which is expected to suppress the profit side in the next two years, but it is within a controllable range.
Various adjustments and reforms were in place, and the company’s performance continued to improve. 1) In terms of internal management mechanism, the company continues to promote flat management, fully delegate power to all business divisions, and effectively stimulate the vitality of internal management. 2) In terms of channels, the company has carried out destocking smoothly in 21 years, and the channel inventory has reached a low level, which is expected to be light in 22 years. 3) In terms of products, the company supplemented the small b-end Dahongpao product line and strengthened the cultivation of large single products of haorenjia brand. 3) In terms of expenses, the company appropriately controls the investment of publicity expenses and is expected to maintain the 21-year fee investment level. The cost contraction is expected to contribute to some profit elasticity. 4) In terms of production capacity, the company raised 1.63 billion yuan to build a food and condiment production base, and the production capacity is expected to reach more than 250000 tons in 22 years, escorting the long-term development of the company. In the future, the polyphonic industry will grow steadily at a high speed of more than double digits, and small and medium-sized brands in the industry have accelerated their exit due to factors such as high costs and weak consumption in 21 years. As the leader of Sichuan flavor polyphonic industry, after 21 years of adjustment, the company’s operating performance is expected to continue to improve in 22 years.
Profit forecast and investment suggestions. It is estimated that the EPS from 2021 to 2023 will be 0.24 yuan, 0.39 yuan and 0.48 yuan respectively, and the corresponding dynamic PE will be 91 times, 56 times and 45 times respectively, maintaining the “buy” rating.
Risk tip: the risk of sharp fluctuations in raw material prices and intensified market competition.
